Mileage Allowance HMRC: Rates, Rules, and How to Claim in 2026

If you use your personal vehicle for business in the UK, you can claim mileage allowance from HMRC. The approved mileage rates let you deduct a set amount per business mile -- no need to track individual fuel receipts, insurance, or maintenance costs. This guide covers the current rates, how to keep a proper mileage log, and when it makes sense to use actual costs instead.

HMRC Approved Mileage Rates 2026

If you carry a passenger on a business trip, you can claim an additional 5p per mile per passenger.

Rate change for 2026/27: HMRC increased the rate for cars and goods vehicles from 45p to 55p per mile for the first 10,000 business miles, with effect from 6 April 2026 for the 2026 to 2027 tax year. The increase is retrospective to 6 April 2026 and covers both the Approved Mileage Allowance Payments employees receive and the self-employed simplified mileage rate. The 45p rate had been frozen since 2011. The 25p rate for miles above 10,000, and the motorcycle (24p) and bicycle (20p) rates, are unchanged. See the HMRC announcement for the detail.

Who Can Claim Mileage Allowance

• Self-employed individuals -- using simplified expenses on their Self Assessment
• Employees -- for business travel not reimbursed by their employer (via Mileage Allowance Relief)
• Company car users -- different Advisory Fuel Rates apply, not the standard mileage rates above

Commuting does not count. Travel from home to your regular place of work is not business mileage. Business miles are journeys to client sites, meetings, temporary workplaces, or business errands.

How to Keep a Mileage Log

HMRC does not prescribe a specific format, but your mileage log should record:

• Date of each journey
• Start and end points (or a description of the route)
• Business purpose of the trip
• Miles driven

You do not need to record your odometer readings, but keeping a consistent log throughout the year is essential. A simple spreadsheet works, or use a mileage tracker app to log trips from your phone.

Simplified Expenses vs Actual Costs

Self-employed individuals have two options for vehicle expenses:

Option 1: Simplified Expenses (Mileage Rate)

Use HMRC's flat rates (55p/25p per mile for cars). This is one of three categories under HMRC's simplified (flat rate) expenses scheme. You cannot also claim for fuel, insurance, repairs, or vehicle depreciation separately. The mileage rate is intended to cover all vehicle costs.

Best for: Lower annual mileage, newer/cheaper vehicles, those who want simplicity.

Option 2: Actual Costs

Track all actual vehicle expenses -- fuel, insurance, repairs, road tax, MOT, breakdown cover, finance interest -- and claim the business-use proportion based on your mileage split. You must keep receipts for everything and calculate your business-use percentage.

Best for: High annual mileage, expensive running costs, those comfortable with detailed record keeping.

Important: Once you choose a method for a particular vehicle, you must stick with it for as long as you use that vehicle for business. You cannot switch between simplified and actual costs.

If using actual costs, scan every fuel and maintenance receipt with an AI receipt scanner -- petrol station receipts are printed on thermal paper that fades within months.

Claiming Mileage on Self Assessment

If you are self-employed, claim mileage on your Self Assessment tax return under business expenses. Making Tax Digital for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income above £50,000, and the threshold falls to £30,000 from 6 April 2027. If you are in scope, keep your mileage records digitally and file quarterly updates. Check whether Making Tax Digital applies to you on GOV.UK.

For the full list of deductible expenses, see our guide to self-employed expenses in the UK. For record keeping rules, see HMRC record keeping requirements.