What expenses can I claim for a vehicle used for business and personal use?

Introduction: why mixed-use vehicle expenses matter

If you use a vehicle for both business and personal trips, you’re in a common position: you want to claim the tax relief you’re entitled to without accidentally claiming too much. The key principle is simple in theory and sometimes fiddly in practice: you can generally claim the costs that relate to business use, but not the portion that relates to private use. How you measure that business portion, which expenses are allowed, and which method you choose to calculate your claim will depend on your local tax rules and the way your vehicle is owned and used. Even so, the core concepts and categories of costs are broadly consistent across many systems.

This article walks through the types of expenses people typically claim for a mixed-use vehicle, how apportionment works, the two most common claiming methods (actual costs versus a fixed mileage rate), and the record-keeping habits that make everything easier. The aim is not to replace professional advice, but to give you a practical framework for deciding what you can claim and how to support it.

The golden rule: only the business portion is claimable

When a vehicle is used for both business and personal reasons, the most important idea is “apportionment.” That means dividing the total vehicle costs between business use and personal use using a reasonable, consistent basis. The most common basis is mileage (or kilometres): you track the miles driven for business during a period, compare it to your total mileage for that same period, and claim that percentage of eligible costs.

For example, if you drive 12,000 miles in a year and 7,200 miles are for business, your business-use percentage is 60%. In an “actual costs” system, you would typically claim 60% of allowable running costs (and in many cases 60% of certain ownership costs as well). Personal trips remain non-deductible, even if they happen to be convenient or occur during a working day.

There’s also a nuance that trips between home and a regular workplace are often treated as personal commuting rather than business travel. In many jurisdictions, commuting is not claimable even if you have business motives for going to work. However, travel from your home to a temporary work site, to a client meeting, or between workplaces is often treated as business travel. Because that distinction can dramatically affect your business mileage percentage, it’s worth understanding how your local rules define business travel versus commuting.

Two common ways to claim: actual costs or a mileage method

Most tax systems that allow vehicle expense deductions give you one of two broad approaches:

1) Actual costs method: You total up eligible vehicle expenses for the year (or relevant period) and then apply your business-use percentage. This method can be more beneficial when your vehicle is expensive to run, you do a lot of business driving, or you have significant costs like insurance, maintenance, and interest. It requires more detailed records.

2) Mileage or fixed-rate method: Instead of claiming individual costs like fuel and repairs, you claim a standard amount per business mile (or kilometre). This rate is intended to represent a bundled average cost of operating a vehicle. It’s usually simpler and involves fewer receipts, but it may yield a smaller deduction if your actual costs are high. Some systems let you add certain extras (like parking or tolls) on top of the mileage claim; others treat the mileage rate as fully inclusive for most running costs.

Which is “better” depends on your mileage, the type of vehicle, fuel prices, maintenance costs, and the rules where you live. The best approach is often to calculate your claim under both methods (if permitted) and choose the one that gives you the greatest allowable deduction while keeping compliance manageable.

What counts as “business use” for vehicle claiming?

Before you even list expenses, you need to define what business use looks like in your situation. Business use typically includes:

Client and customer visits: Driving to meet a client, inspect a site, deliver a service, attend a sales meeting, or follow up on a project.

Travel between workplaces: Driving from one job site to another, from your office to a warehouse, or from a shop to a supplier.

Temporary work locations: Driving to a temporary site for a short-term assignment can often count as business, even if it is farther away than your usual workplace.

Business errands: Trips to buy supplies, visit the post office for business shipping, take equipment to be repaired, or attend a business bank appointment.

Personal use typically includes errands unrelated to the business, social travel, holidays, and commuting to a regular workplace (in many places). If you work from home and your home is your principal place of business, trips from home to other business locations are more likely to qualify as business travel, but the details can be jurisdiction-specific.

Core expense categories you can often claim under the actual costs method

If you use the actual costs method, you will normally look at two main buckets: running (operating) costs and ownership (capital or financing) costs. Many systems also have special rules for depreciation or capital allowances, which is how you deduct the cost of buying the vehicle over time rather than all at once.

Fuel: petrol, diesel, electricity, and alternative fuels

Fuel is usually the most obvious claimable operating cost. Under the actual costs method, you typically claim the business portion of:

Petrol or diesel: All fuel bought for the vehicle during the claim period, apportioned by business mileage.

Electric charging costs: Charging at public stations is easiest because the cost is clearly documented by the charging receipt. Home charging can be trickier, because it may be mixed with household electricity usage. In many cases, you can still claim the business portion, but you need a reasonable method to calculate it, such as using a dedicated charger with metering, an estimate based on vehicle kWh consumption and electricity tariffs, or other acceptable evidence depending on local rules.

Oil and fluids: Engine oil, AdBlue (where relevant), coolant, windshield washer fluid, and other consumables are often treated similarly to fuel as operating costs.

If you use a mileage method, fuel is commonly considered “included” within the per-mile rate, meaning you do not also claim fuel separately (unless your rules explicitly allow a separate claim, such as limited “actual fuel” add-ons, which is less common).

Repairs and maintenance

Repairs and maintenance are usually claimable to the extent they relate to business use. This category includes:

Routine servicing: Regular scheduled services, oil changes, inspections, and manufacturer maintenance.

Mechanical repairs: Fixing faults, replacing parts, or addressing wear and tear.

Tyres: New tyres, puncture repairs, balancing, and alignment are typically included as maintenance.

Car washes and cleaning: Some systems allow cleaning costs if they are connected to business usage (for example, keeping a branded vehicle presentable or maintaining cleanliness for client visits). Others treat routine cleaning as too personal. Where permitted, the same apportionment principle usually applies.

What generally doesn’t qualify is spending that primarily enhances the vehicle beyond its original condition, such as major upgrades or customisations, which can fall into capital territory (more on that later). Repairs that restore the vehicle to working order are usually operating costs, while improvements that extend life or increase value can be treated differently.

Insurance

Vehicle insurance is commonly claimable in proportion to business use under the actual costs method. Depending on the policy and your local framework, this can include:

Comprehensive or third-party insurance: The annual premium (or monthly payments) for coverage.

Business-use add-ons: Additional costs to insure business driving, deliveries, or carrying tools.

Breakdown cover: Roadside assistance can be considered an operating cost.

If you use a mileage method, insurance is usually treated as included in the rate and not claimed separately, though again rules vary.

Vehicle tax, registration, inspections, and compliance costs

Many jurisdictions impose annual vehicle taxes, registration fees, inspection charges, or compliance costs. Under an actual costs approach, the business portion of these can often be claimed, such as:

Registration fees: Annual or periodic registration charges.

Vehicle taxes: Road tax, registration tax, or similar mandatory charges.

Safety inspections: Periodic roadworthiness inspections or emissions tests where required.

Licensing and permits: Certain industries require permits for specific vehicles or use cases, which may be claimable as business expenses.

Fines and penalties, however, are very often not deductible even if incurred while driving for business. Parking fines, speeding tickets, and similar penalties are typically treated as non-deductible.

Parking fees and tolls

Parking and tolls are common business travel costs. In many systems:

Business parking: Parking fees while visiting clients, attending meetings, or parking at a temporary work site are often deductible.

Tolls: Road tolls for business journeys are commonly deductible.

Congestion or low-emission zone charges: Charges incurred on business trips may be deductible under some rules.

Even when you use a mileage method, many jurisdictions allow you to claim parking and tolls separately because they are not included in the mileage rate. Be careful though: some fixed-rate systems treat certain charges as included or impose specific restrictions.

Lease payments, hire purchase, and finance interest

How you claim the cost of “having” the car depends on whether you own it, lease it, or finance it.

Leasing: If you lease a vehicle, you may often claim the business portion of your lease payments under the actual costs method. Some systems restrict the deductible portion for higher-value vehicles or require adjustments for private use. You may also be able to claim certain lease-related fees, such as administration charges, subject to local rules.

Hire purchase or financing: If you bought the vehicle using a loan or finance agreement, you may be able to claim the business portion of the interest (not the principal repayments) as an expense, while the purchase cost of the vehicle is recovered through depreciation or capital allowances. The principal portion is typically not treated as a deductible expense because it’s repaying a capital amount.

It’s important to separate these items in your records. Finance statements usually show interest charged, and accountants often use that to calculate the allowable interest deduction.

Depreciation or capital allowances on the vehicle

When you buy a vehicle, you usually can’t deduct the full purchase price in one year (unless special rules apply). Instead, you claim depreciation (in accounting terms) or a tax-specific form of depreciation known as capital allowances. The details vary widely by country, but the underlying idea is that the vehicle’s cost is written off over time as it is used in the business.

For mixed-use vehicles, the deductible depreciation or capital allowance is usually limited to the business-use percentage. If your business use is 60%, then typically only 60% of the allowable depreciation amount is deductible.

Some systems impose additional restrictions depending on the type of vehicle (for example, passenger cars versus commercial vans) and environmental factors (such as CO2 emissions). Others cap the cost on which you can claim depreciation for luxury vehicles. Because the rule-set can be complex, many people rely on accounting software or professional advice to calculate capital allowances correctly.

Another nuance is what happens when you sell the vehicle. Many tax regimes require an adjustment when a business asset is disposed of, especially if you previously claimed depreciation or allowances. In mixed-use scenarios, the business portion of any gain or loss may need to be calculated. Keeping good records from the start makes this much less painful later.

Interest, bank fees, and other borrowing costs

Beyond straightforward vehicle finance interest, there may be other costs related to borrowing or payment processing, such as loan arrangement fees or bank charges. Whether these are deductible, and how they should be spread over time, depends on local rules. In many cases, the business portion of such fees may be deductible, but the method of deduction can differ.

If your vehicle is partly financed and you use it partly for private purposes, it’s common to apportion the interest cost based on business use of the vehicle, although some systems use different concepts for interest deductibility. It’s best to treat this category carefully and keep statements and documents that support what the charges relate to.

Mobile phone mounts, hands-free kits, and minor accessories

Small accessories used primarily for business driving can sometimes be claimed as business expenses, especially where they support safe or practical work travel. Examples include a basic phone holder, a charging cable used in the car for work calls, or a hands-free kit required to comply with safe driving laws. These are typically minor items and may be treated as operating expenses, but high-value accessories may be treated as capital items.

A good way to think about accessories is: are they mainly for enabling business travel, or are they personal preferences? The more “business necessity” the item has, and the more you can show it is used for business purposes, the easier it is to justify. If the accessory is dual-purpose, apportionment may still apply.

Vehicle modifications and improvements: expense or capital?

Not every spend on a car is treated the same. A repair restores the vehicle; an improvement enhances it. Improvements can include upgraded audio systems, significant custom modifications, or changes that increase the vehicle’s value or extend its useful life beyond what a repair would do. Some systems treat improvements as capital costs that must be depreciated rather than deducted immediately.

Work-related modifications can also exist, such as adding roof racks, storage solutions for tools, or signwriting/branding. Depending on local rules, these might be treated as operating costs, capital costs, or marketing expenses. The important thing is to categorize them consistently and keep invoices that describe what was done and why.

What you usually cannot claim

Mixed-use vehicle claiming isn’t just about what you can include. It’s also about knowing what to leave out. Common non-claimable items include:

Personal mileage: Private trips remain non-deductible under almost all systems.

Ordinary commuting: Travel between home and a regular workplace is frequently treated as personal commuting.

Fines and penalties: Parking tickets, speeding fines, and similar penalties are commonly disallowed.

Personal add-ons: Items that are primarily personal, such as purely cosmetic customisations, may not be allowable as business expenses.

There can be grey areas. For example, if you have a vehicle that is heavily branded and primarily used for business, your local rules might treat some things differently. But as a general mindset, claim only what you can comfortably defend as business-related, and apply apportionment for mixed-use items.

How to calculate the business-use percentage

The business-use percentage is the engine that drives a mixed-use vehicle claim under the actual costs method. The most common approach is mileage-based apportionment. Here’s a straightforward process:

Step 1: track business mileage. Record each business trip’s date, start and end locations, purpose, and mileage.

Step 2: track total mileage. Capture the vehicle’s odometer reading at the start and end of the period (for example, the tax year). The difference is your total mileage.

Step 3: compute the percentage. Divide business miles by total miles.

Step 4: apply the percentage. Multiply eligible costs by the business-use percentage to determine your deductible amount.

In practice, many people use a logbook app to automatically track trips, then categorize them as business or personal. Others keep a paper log. Either can work as long as it is consistent, accurate, and supported by evidence (such as calendar entries, client invoices, or job sheets that corroborate your travel).

Some tax systems allow a representative period log (for example, keeping a detailed log for a number of weeks and then extrapolating), while others require ongoing records. If your mileage pattern changes significantly during the year, a sample period may not reflect reality well, and it can weaken your position if questioned.

Actual costs method: a practical checklist of claimable expenses

To make this concrete, here is a practical checklist of expenses that are commonly claimable under an actual costs approach, subject to apportionment for mixed use:

Operating costs:

Fuel (petrol/diesel/electric charging), oil, fluids, repairs, servicing, tyres, replacement parts, vehicle cleaning (where allowed), roadside assistance, parking fees for business trips, tolls, congestion charges for business trips, and certain minor accessories.

Ownership/financing costs:

Insurance, registration and vehicle taxes, lease payments (if leasing), interest on vehicle finance (if financed), depreciation or capital allowances (if owned), and sometimes loan arrangement fees or similar costs depending on rules.

Business-specific add-ons:

Commercial insurance upgrades, vehicle tracking required by your work, tool storage solutions, roof racks, and signwriting/branding (treatment varies).

This is not exhaustive and not universal. The key is to map each cost to your local rules and keep the evidence that shows it was incurred and how you calculated the business portion.

Mileage method: what’s usually included and what may be extra

A mileage method is designed for simplicity. The standard rate per business mile typically covers a bundle of costs such as fuel, routine maintenance, depreciation, and insurance. Because it’s a “one number” claim, you normally do not claim the same running costs again.

However, many jurisdictions that offer a mileage rate allow certain costs on top, most commonly:

Parking for business trips: Paid parking while working.

Tolls: Road tolls for business journeys.

Occasionally other charges: In some systems, specific charges like congestion fees may be treated similarly to tolls.

If your rules allow add-ons, keep receipts for those items and link them to business journeys. If your rules do not allow add-ons, then you must treat them as included in the per-mile claim even if they feel separate in real life.

How to decide between mileage and actual costs

If you’re allowed to choose, the decision often comes down to three factors: how much you drive for business, how expensive your vehicle is to run, and how much admin you can tolerate.

Mileage method tends to suit you if:

You want a clean, simple claim, you have a relatively economical vehicle, you don’t have unusually high repair or insurance costs, and you value minimal record-keeping (beyond a reliable mileage log).

Actual costs tend to suit you if:

You drive a lot of business miles, your vehicle has high running costs, you pay substantial insurance, you have significant repairs or maintenance, or you operate in a way where the mileage rate would understate your real costs.

Also consider consistency rules. In some places, once you pick one method for a vehicle, you must stick with it for that vehicle or for a number of years. In others, you can choose year by year. A method that is best this year might not be best next year if your mileage or costs change dramatically.

Special situations: self-employed, employees, company vehicles, and allowances

Your ability to claim mixed-use vehicle expenses depends a lot on whether you are self-employed, an employee using your own car for work, or using a company vehicle.

Self-employed or business owners: You may be able to claim a wider set of vehicle costs because the vehicle is used in producing business income. You still need to apportion personal use.

Employees using a personal vehicle: Some tax systems limit employee claims to specific mileage allowances or reimbursements. You may only be able to claim unreimbursed expenses or the difference between a reimbursement received and an approved rate. The exact mechanics vary widely, but the theme is that employees often face more restrictions than business owners.

Company vehicles: If the business owns or leases the vehicle and you use it personally, personal use may be treated as a taxable benefit. In those cases, the business may deduct expenses, but you may be taxed on the private benefit, and the reporting and calculation can be more complex.

Car allowances and reimbursements: If you receive a vehicle allowance or mileage reimbursement, that can affect what you can claim. Sometimes reimbursements reduce your deductible amount; other times they are treated as income and you claim expenses separately. Keep clear records of what you received and why.

Record keeping: what to keep, and how to keep it

Good records turn vehicle claiming from stressful to straightforward. Whether you use actual costs or mileage, you want documentation that shows what you claimed and why it was business-related.

For mileage logs:

Track the date, start point, destination, purpose of the trip, and mileage. If you use an app, periodically review the trips and categorize them correctly. If you keep a manual log, make entries contemporaneously (not months later). Record odometer readings at the beginning and end of the period.

For receipts and invoices:

Keep fuel receipts (or charging receipts), repair invoices, service bills, insurance schedules, registration documents, toll statements, and parking receipts. If you pay through a business card or bank account, keep statements as supporting evidence, but don’t rely on statements alone where a receipt is expected.

For mixed-use allocations:

Keep the calculation that links business mileage to total mileage and shows your business-use percentage. If your claim is challenged, being able to show the logic and data is often as important as the receipts.

For vehicle acquisition and sale:

Keep purchase invoices, finance agreements, and records of sale. If you claim depreciation or capital allowances, you need these documents later for disposal calculations.

Worked example: actual costs claim for a mixed-use vehicle

Let’s imagine you use your personal car for a mixture of client visits and private life. Over the tax year you drove 15,000 miles in total. Your mileage log shows 9,000 miles were for business journeys. Your business-use percentage is therefore 9,000 / 15,000 = 60%.

Your eligible annual costs are:

Fuel: 2,000

Insurance: 900

Repairs and servicing: 700

Tyres: 300

Registration and vehicle tax: 250

Breakdown cover: 120

Parking and tolls for business journeys: 200

Total costs: 4,470

You would typically claim 60% of the apportioned costs: 4,470 x 60% = 2,682. If parking and tolls are already purely business and documented per trip, some systems allow those to be claimed at 100% without apportionment. That’s why it’s useful to separate “always business” costs (like a client parking fee) from costs that support all driving (like insurance). The exact approach depends on local rules, but the principle remains: claim the business portion and keep a clear trail that supports it.

Worked example: mileage method claim

Now imagine instead you use a mileage rate. Your business mileage remains 9,000 miles. You multiply that by the approved rate to calculate the claim. If your system allows you to add parking and tolls, you would then add those receipts on top.

The advantage is simplicity: you don’t need to total every fuel receipt or apportion insurance. The disadvantage is that the rate might not reflect your actual costs, especially if your car is expensive to run. Many people test both methods (where permitted) to see which is more beneficial.

Common mistakes to avoid

Vehicle claims are frequently audited in some jurisdictions because errors are common. Here are pitfalls that can trip people up:

Not keeping a mileage log: Estimating business mileage without supporting records is risky and can lead to disallowed claims.

Claiming commuting as business travel: If your system treats commuting as personal, including it will inflate your business percentage.

Double-claiming: Claiming mileage rate and then also claiming fuel and repairs is often not permitted.

Mixing personal and business receipts: Paying vehicle costs from multiple accounts is fine, but you must be able to show what relates to the vehicle and how it was allocated.

Ignoring capital rules: Treating the vehicle purchase price as a simple expense can be wrong if your system requires depreciation or capital allowances.

Forgetting disposal adjustments: If you claimed depreciation or allowances, selling the vehicle may require a tax adjustment.

A conservative, well-documented approach usually beats an aggressive, poorly supported claim.

How to make mixed-use claiming easier all year

You don’t have to wait until tax season to get organised. A few habits can make mixed-use vehicle claiming almost automatic:

Use a mileage tracking app: Automatic tracking reduces missed trips. Set a weekly reminder to categorize trips as business or personal while you still remember them.

Keep a “vehicle” folder: Whether digital or paper, store insurance renewals, service invoices, and registration documents in one place.

Separate business-only costs where possible: If parking and tolls are business-only and you can capture them per trip, they’re easier to justify. Save receipts and note the client or job on them.

Capture odometer readings: Take a photo of your odometer at the start and end of the year (or relevant period). It’s quick evidence of total mileage.

Review your method annually: If your rules allow switching methods, compare mileage-rate versus actual-cost outcomes each year based on your real data.

FAQ-style clarifications for mixed-use vehicle expenses

Can I claim fuel for personal trips if I drove to a client the same day? No. The fact that business and personal trips occur on the same day doesn’t make personal mileage deductible. The separation is about the purpose of each journey.

What if I use two vehicles? You can often claim business use for each vehicle separately, but you need logs and expense records for each. Some systems require consistent methods per vehicle.

What if I occasionally rent a car for business? Short-term rental costs for business travel may be deductible, often without the same kind of long-term apportionment issues, as long as the rental is for business and properly documented. If the rental includes personal use, apportionment may apply.

Are vehicle accessories always claimable? Not always. Small, business-relevant accessories may be deductible, but large upgrades can be treated as capital or personal. Keep invoices and document the business reason.

Do I need receipts for everything? Requirements vary. Even where a mileage method reduces receipt needs, you usually still need evidence of business mileage. For actual costs, receipts are commonly expected for major expenses. When in doubt, keep the paperwork.

Conclusion: claim confidently by tracking business use and choosing the right method

When your vehicle is used for both business and personal reasons, the path to a clean, defensible claim is built on two pillars: accurately measuring business use and applying the right claiming method. Under the actual costs method, you can often claim a share of fuel, maintenance, insurance, registration, and certain financing or ownership costs, plus business-specific charges like parking and tolls. Under a mileage method, the claim is typically simpler and based on business miles multiplied by a fixed rate, sometimes with specific add-ons like parking and tolls.

The best outcome is rarely about stretching the rules. It’s about choosing the method that matches your situation, applying apportionment honestly, and keeping records that tell a clear story. With a consistent mileage log and organised receipts, you can claim what you’re entitled to while staying comfortable that your numbers would stand up to questions later.