HMRC Mileage Allowance for the Self-Employed: 2026/27 Guide

If you use your own vehicle for business journeys as a self-employed person, you can deduct a per-mile allowance from your taxable profit. This is the Approved Mileage Allowance Payment (AMAP) system — HMRC's simplified method for claiming vehicle costs without tracking actual fuel, insurance, servicing, and depreciation separately. For most sole traders who drive a moderate number of business miles each year, the AMAP rate is the simpler and often more generous choice.

The 2026/27 AMAP rates

| Vehicle type | First 10,000 miles | Above 10,000 miles | |---|---|---| | Cars and vans | 45p per mile | 25p per mile | | Motorcycles | 24p per mile | 24p per mile | | Bicycles | 20p per mile | 20p per mile |

The 10,000-mile threshold resets each tax year. Every year, your first 10,000 business miles qualify at 45p; everything above that drops to 25p.

Example — 15,000 business miles in a year:

• First 10,000 miles: 10,000 × £0.45 = £4,500
• Remaining 5,000 miles: 5,000 × £0.25 = £1,250
• Total mileage claim: £5,750

This £5,750 is deducted from your self-employment profit, reducing your income tax and Class 4 NI liability accordingly. Use the HMRC Mileage Calculator to calculate your annual mileage deduction.

What counts as a business journey

A business journey is travel that is necessary for the purpose of your trade. It does not include:

• Ordinary commuting — journeys from your home to a fixed regular workplace are not claimable. If you have a fixed office outside your home and drive there every day, those miles are commuting, not business travel.
• Private journeys — personal trips mixed with business legs must be apportioned

Business journeys that do qualify include:

• Travel to visit clients, customers, or suppliers at their premises
• Travel to temporary work locations (places you work for no more than 24 months, or less than 40% of your working time)
• Travel for professional training or courses required for your work
• Travel to collect business materials or equipment
• Journeys between two workplaces (for example, your home office and a client site)

For sole traders who work primarily from home, most client visits qualify as business journeys because home is the base of operations. This is a significant advantage over employees with a fixed employer workplace.

How to keep a mileage log

HMRC requires you to keep a mileage record to support your mileage claim. The log must show:

• Date of each journey
• Start point and destination
• Business purpose of the journey
• Miles driven

You don't need a physical paper log — a spreadsheet, a dedicated mileage app (MileIQ, TripLog, HMRC's own recording methods), or even calendar entries with distances are all acceptable evidence. The key requirement is that the record exists and can be produced if HMRC enquires.

Keep mileage records for at least six years after the relevant tax year (the standard HMRC records retention period).

A common mistake is to estimate annual mileage rather than recording individual journeys. HMRC will not accept a broad estimate without supporting evidence — you need to be able to show each journey. Building the recording habit is easier than reconstructing it later.

Passengers: the extra 5p per mile

If you carry employees (not clients) in your vehicle on business journeys, you can claim an additional 5p per passenger per mile on top of the standard AMAP rate. This additional rate does not apply to carrying clients or customers — only fellow employees.

Most sole traders don't employ staff, so this provision rarely applies. For those who do, it's a genuine additional deduction.

The choice: AMAP vs actual costs

AMAP is a simplified method. The alternative is to claim actual vehicle costs — the real costs of running the vehicle, proportioned to business use. Under the actual cost method, you claim:

• Fuel
• Insurance
• Road tax
• Servicing and repairs
• MOT
• Depreciation (through capital allowances)

Proportioned by the business-use percentage of total mileage. If you drive 20,000 miles a year and 15,000 are business miles, 75% of total running costs are claimable.

The critical rule: you must choose one method when you start using a vehicle for business, and stick with it for that vehicle. If you switch between a vehicle owned personally and one owned by the business, the rules change. You cannot switch methods mid-way through a vehicle's use.

When actual costs are better:

• High-mileage drivers (above 10,000–15,000 business miles) in vehicles with low running costs
• Electric vehicles (electricity costs per mile are very low, but purchase costs are high — capital allowances can be generous)
• Vehicles with very high running costs (older or high-maintenance vehicles)

When AMAP is better:

• Moderate business mileage (under 10,000 miles)
• New drivers who haven't calculated their actual running costs
• People who value simplicity over optimising every claim

For most self-employed people driving a family car for moderate business mileage, the AMAP rates are simpler and competitive. The HMRC Mileage Calculator shows your AMAP claim so you can compare it against a rough estimate of your actual costs.

Electric vehicles

The AMAP rate for cars includes electric vehicles — the same 45p/25p rates apply regardless of fuel type. This is particularly generous for EV drivers since the actual cost of electricity per mile is typically 3–5p, compared to the 45p AMAP rate. The gap between actual electricity cost and the AMAP rate represents a significant additional deduction for self-employed EV owners using their vehicles for business.

Under actual cost accounting, EV owners can claim 100% first-year allowances on the vehicle purchase (for fully electric vehicles), which can be extremely valuable in the year of purchase but reduces subsequent claims.

VAT reclaim on mileage (if VAT-registered)

If you're VAT-registered and using the standard VAT accounting method (not the Flat Rate Scheme), you can reclaim VAT on the fuel element of the AMAP rate. HMRC publishes advisory fuel rates by engine size and fuel type, updated quarterly — you can reclaim VAT on the fuel-only component of the mileage rate.

For example, for a 1600cc petrol car, HMRC's advisory fuel rate might be 14p per mile. On 10,000 business miles: 10,000 × £0.14 = £1,400 of deemed fuel cost; the VAT element is £1,400 × 1/6 (20% VAT) = £233.33 claimable as input VAT.

This reclaim is separate from the AMAP deduction itself and requires the keeping of fuel receipts.

Claiming on your Self Assessment return

Mileage costs are claimed in the "expenses" section of your Self Assessment return. For business expenses generally, the SA return provides for vehicle costs either under the AMAP method or actual costs — your accountant or the online SA form will walk you through which section applies.

The Self Assessment Estimator includes allowance for vehicle expenses as part of your overall profit calculation.