What mileage rates can sole traders claim in the UK?

What mileage rates can sole traders claim in the UK?

If you’re a sole trader in the UK and you use your own vehicle for business journeys, claiming mileage can be one of the simplest ways to deduct motoring costs for tax. But “simple” doesn’t mean “automatic.” Mileage claims sit at the intersection of HMRC rules, practical record-keeping, and a choice you make early on about how you want to calculate vehicle expenses. Understanding the mileage rates you can claim, when you can use them, and how to keep your claim compliant can save you money, reduce stress, and help you avoid unpleasant surprises later.

This article explains the mileage rates sole traders can claim in the UK, how those rates work in practice, what kinds of trips count as business journeys, and how to avoid common mistakes. It also covers what changes when you use different types of vehicles, how the “simplified expenses” method compares to claiming actual costs, and what you should capture in your mileage log to support your claim.

Why mileage claims exist and what they’re meant to cover

When you drive for business, you’re incurring a mix of costs: fuel, servicing, tyres, insurance, road tax, breakdown cover, and the gradual wear-and-tear on the vehicle itself. If you’re self-employed, HMRC allows you to deduct the business portion of those costs so that you’re taxed on profit, not on turnover.

Mileage claims offer a straightforward alternative to splitting every actual bill between personal and business use. Instead of tracking each real-world cost, you can claim a fixed amount per business mile. That fixed amount is designed to represent the overall cost of running a vehicle, averaged out over time. It’s not a direct refund of fuel and it’s not meant to precisely match your actual spending in any given month. It’s a standardised way to calculate a tax-deductible expense.

For many sole traders—especially those who do a moderate amount of business driving—mileage claims can be easier to administer and easier to explain if you ever need to evidence your figures.

The main mileage method for sole traders: simplified expenses

Sole traders generally have two broad ways to claim vehicle costs:

1) Use HMRC’s simplified expenses (mileage rates).
2) Claim actual vehicle costs and apportion them between business and private use.

This article focuses on mileage rates, which sit under the simplified expenses approach. The simplified method is popular because it reduces paperwork and gives you predictable numbers. However, it isn’t automatically the best financial outcome for everyone, and there are rules about eligibility and switching methods that you should understand before you commit.

The mileage rates sole traders can claim for cars and vans

For business use of your own car or van, the standard mileage rates are:

45p per mile for the first 10,000 business miles in the tax year.
25p per mile for any business miles above 10,000 in the same tax year.

These rates apply to cars and vans, and they are calculated across your total business miles for the entire tax year. The “first 10,000 miles” is not per client, per trip, or per month—it is a cumulative total for the tax year.

Here’s a practical example. Suppose you drive 12,000 business miles in the tax year using your own car for work. Your mileage deduction would be:

10,000 miles x 45p = £4,500
2,000 miles x 25p = £500
Total claim = £5,000

That £5,000 is an allowable business expense. It reduces your taxable profit. It is not a cash payment from HMRC; it simply lowers the profit figure that your Income Tax and National Insurance are calculated on.

Motorcycles have their own mileage rate

If you use a motorcycle for business journeys, the mileage rate is typically:

24p per mile for business miles.

There isn’t the same 10,000-mile threshold structure as cars and vans for the commonly used motorcycle mileage rate. The principle is the same: track business miles and apply the rate to calculate an allowable expense.

Bicycles have a separate (lower) mileage rate

If you cycle for business, you can generally claim:

20p per mile for business miles travelled by bicycle.

For many sole traders, bicycle mileage claims are relatively small, but they can still add up if you do local visits, deliveries, or regular travel between job locations. The same record-keeping principles apply: you need a log of business journeys and distances.

What counts as a “business journey” for mileage claims?

The most important question isn’t the rate—it’s whether the miles qualify. HMRC focuses on the purpose of the journey. A business journey is travel that is wholly and exclusively for business purposes. In practice, common examples of qualifying business journeys include:

- Travelling from your work base to a client site or customer premises.
- Driving to a supplier to collect materials needed for a job.
- Travelling between multiple job sites in a day (for example, a tradesperson moving between properties).
- Driving to a temporary workplace for a limited-duration project.
- Attending business meetings away from your normal base of operations.
- Travelling to a training course that is directly related to maintaining or improving skills used in your current trade (not training that qualifies you for an entirely new trade).

By contrast, ordinary commuting is not a business journey. If you travel from home to your regular place of work, that’s generally treated as private travel, even if you do business tasks once you arrive. For sole traders, the “regular place of work” question can be nuanced, particularly if you work from home or your work locations vary.

If your home is genuinely your main place of business (for example, you work from a home office, handle admin there, store equipment there, and you don’t have another permanent base), then travel from home to a client may be more likely to be treated as business travel. If, however, you regularly travel to a fixed location that functions as your main base (like a rented office, studio, or workshop you attend most days), then travel from home to that location may be classed as commuting and not allowable.

Because this area can be fact-specific, the safest approach is to document your working pattern and be consistent in how you classify trips. If in doubt, many sole traders choose to keep a clear, conservative mileage log and avoid stretching the definition of business travel.

Mixed-purpose journeys and “dual purpose” travel

Real life rarely runs on neat categories. You might drive to a client and stop at the supermarket on the way back, or you might visit two clients and also drop a child at an activity. When a journey has both business and personal elements, you need to identify the business portion.

A good rule of thumb is to claim only the miles that are genuinely for business. If you detour for personal reasons, don’t claim the detour. If the trip is primarily personal and business is incidental, you may not be able to claim it at all.

For example:

- If you drive to a client appointment and then take a short detour to pick up a personal item, you can typically claim the core business route, excluding the detour.
- If you drive to visit a friend in another city and “happen to” drop off a business parcel on the way, the journey is likely to be viewed as fundamentally personal, and claiming the full distance would be risky.

In your log, it helps to capture enough detail to demonstrate the business purpose of each trip, and to note any adjustments if you’ve excluded personal detours.

How the 10,000-mile threshold works in practice

The 10,000-mile threshold for cars and vans is applied to the total number of business miles in the tax year. The UK tax year runs from 6 April to 5 April.

That means you should track business miles across the entire year and apply the higher rate (45p per mile) until you reach 10,000. After that, you apply 25p per mile to additional business miles.

Some sole traders prefer to keep a running total monthly, so they know when they’re approaching the threshold. This isn’t required, but it can help you estimate your profits and tax bill more accurately, and it reduces the risk of mistakes at year-end.

What the mileage rate is intended to include

If you use simplified mileage rates, it’s important to understand what you are and aren’t claiming. The mileage rate is intended to represent the overall running costs of the vehicle. In general terms, it covers things like:

- Fuel or electricity used for driving.
- Routine maintenance and servicing.
- Repairs and replacement tyres.
- Vehicle insurance.
- Vehicle Excise Duty (road tax).
- MOT (where applicable).
- Depreciation (the vehicle losing value over time).

When you claim mileage using the simplified method, you generally do not also claim those vehicle running costs separately, because they’re already built into the mileage rate.

However, certain costs are often treated separately from the standard mileage rate. Parking fees for business trips and some tolls or congestion charges incurred during business travel can typically be claimed in addition to mileage, provided they are wholly and exclusively for business purposes. The idea is that these are journey-specific costs rather than general running costs.

Can you claim mileage for an electric car?

Yes, a sole trader can generally claim mileage for business use of an electric car using the same mileage rates as petrol or diesel vehicles when using the simplified method. The rate is per mile, regardless of the type of fuel.

This can be beneficial for simplicity: you don’t need to calculate how much electricity was used for charging attributable to business miles. You simply record business mileage and apply the relevant rate.

That said, whether the mileage method is more beneficial than claiming actual costs can vary with electric vehicles, especially if charging costs are low and the vehicle’s purchase price and depreciation profile are significant. The simplified method trades precision for convenience.

What about leased vehicles or hire purchase?

Sole traders often ask whether they can use mileage rates if the vehicle is leased, financed, or on hire purchase. The mileage method is generally associated with using your own vehicle for business. In many real-world cases, a vehicle on finance or hire purchase may still be considered your vehicle for these purposes, but details matter: who is the registered keeper, who is responsible for running costs, and how the agreement is structured.

Because agreements can differ widely, the key practical takeaway is this: you should choose one method—mileage or actual costs—and apply it consistently based on the rules that apply to your situation. If you’re unsure which category your arrangement falls into, it’s wise to seek professional advice so your claim method matches the legal reality of the vehicle arrangement.

Choosing between mileage rates and actual costs

The mileage method is not mandatory. You can instead claim actual vehicle expenses, proportioned between business and private use. Under that approach, you would typically track:

- Fuel (or electricity) costs.
- Insurance.
- Repairs and servicing.
- Road tax and MOT.
- Breakdown cover.
- Interest (depending on the finance arrangement and accounting method).
- Capital allowances on the vehicle purchase (rather than depreciation).

Then you would apply a business-use percentage—often based on mileage—to those costs to determine how much is allowable.

So how do you choose?

Mileage rates (simplified expenses) may suit you if:
- You want simpler bookkeeping.
- You do a moderate amount of business driving and don’t want to split every bill.
- Your vehicle running costs are relatively low, and the mileage rate produces a generous deduction.

Actual costs may suit you if:
- Your vehicle is expensive to run, and the mileage rate doesn’t cover your costs well.
- You have a lot of repair or servicing costs in a particular year.
- You prefer accuracy and don’t mind the administrative effort.
- You want to claim capital allowances on a purchased vehicle where that works out better.

Once you choose a method for a vehicle, you generally need to stick with it for that vehicle. Switching back and forth can be restricted or may complicate your tax position. That’s why it’s worth thinking through your likely annual business mileage, your vehicle costs, and your preference for administration early on.

How mileage claims interact with the £1,000 trading allowance

Some sole traders use the trading allowance, which allows you to earn up to a set amount of trading income and either pay tax on the excess or, depending on circumstances, use it instead of claiming expenses. If you use the trading allowance as a deduction instead of itemised expenses, you generally cannot also claim mileage separately as an expense, because the allowance is meant to replace detailed expense claims.

In practical terms, the choice is often: either claim the trading allowance or claim actual expenses (including mileage). Which is better depends on your business income and your costs. If your business expenses are typically higher than the allowance, claiming expenses will usually reduce taxable profit more. If your expenses are low, the allowance can be simpler and sometimes more beneficial.

What records should a sole trader keep for mileage claims?

To claim mileage confidently, you need a mileage log. It doesn’t have to be complicated, but it should be consistent and detailed enough to support the business purpose of the travel. A robust mileage record typically includes:

- Date of the journey.
- Start location and end location.
- Purpose of the trip (client meeting, site visit, supplier pickup, etc.).
- Odometer reading at start and end (optional but helpful).
- Number of business miles for the journey.
- Any notes about detours or mixed-purpose adjustments.

You can keep this in a notebook, spreadsheet, bookkeeping software, or a mileage tracking app. Apps can be convenient because they can automatically map journeys and calculate distances, but you still need to ensure the trips are correctly categorised as business or personal.

It’s also useful to record the total mileage for the vehicle in the year (business plus personal). While simplified mileage claims focus on business miles, having a sense of total mileage can provide a reasonableness check and can be helpful if you ever need to explain your patterns of use.

How to calculate a mileage claim step-by-step

Here is a straightforward process most sole traders can follow:

1) Track each business journey as it happens or as soon as possible after.
2) Add up your business miles for the tax year.
3) For cars and vans, apply 45p per mile to the first 10,000 business miles.
4) Apply 25p per mile to any business miles above 10,000.
5) For motorcycles, apply the motorcycle rate to total business miles.
6) For bicycles, apply the bicycle rate to total business miles.
7) Add any separately allowable travel costs (like business parking) if applicable and properly recorded.
8) Enter the total as a business expense in your accounts.

The key is that your totals should tie back to a record. If you are ever asked to provide evidence, a mileage log with clear entries is far more persuasive than a single number written down at the end of the year.

Common mistakes to avoid

Mileage claims are often scrutinised because they can be easy to inflate without obvious evidence. Avoid these common pitfalls:

Claiming commuting miles. Travel from home to a regular workplace is generally not allowable. If your pattern is complex, document it carefully and be conservative.

Estimating without records. “I think I drove about 8,000 miles for work” is not a record. Even if your estimate is honest, it is harder to defend than a log.

Claiming both mileage and actual running costs. If you use the mileage method for a vehicle, you generally should not also claim fuel, repairs, insurance, and similar running costs for that same vehicle as additional expenses.

Forgetting the 10,000-mile threshold. For cars and vans, the rate drops after 10,000 business miles in the tax year. Make sure you apply the correct rate to each portion.

Not separating personal detours. If you combine business and personal errands, claim only the business portion and exclude personal mileage.

Claiming unclear or vague “business travel.” Each entry should have a purpose that relates to your trade. “Trip across town” is less useful than “Site visit: Smith kitchen install” or “Client meeting: proposal review.”

Special situations: working from home and multiple work locations

Many sole traders work from home some or all of the time. If your home is your main base of operations, travel from home to temporary workplaces or client sites may be business travel. If you rent a unit or office that functions as your base, travel from home to that base may be commuting.

If you have multiple regular work locations, the analysis can become trickier. For example, a sole trader might split their week between a studio and a client-facing location. In these cases, it’s especially important to understand what counts as your main base, whether a location is “temporary” or “permanent,” and how consistent your pattern is over time.

The practical approach is to keep detailed records, align your claims with a sensible interpretation of business travel, and be consistent year on year. Where arrangements change (for instance, you stop renting an office and begin working from home full-time), your treatment of mileage may legitimately change too, and good notes make that easier to justify.

What if you use more than one vehicle?

Sole traders sometimes use more than one vehicle for business—perhaps a car and a van, or they switch vehicles mid-year. Mileage claims can still work, but you should keep records per vehicle so you can show business use clearly. The mileage rates for cars and vans operate by business miles in the tax year, and you should ensure you apply the logic correctly if business miles are split across vehicles.

In practice, good bookkeeping software or a spreadsheet can help you track business miles by vehicle and maintain clarity if you ever need to explain your claims.

Can you claim mileage for travelling to see an accountant or bank?

Trips that are clearly for business administration can be treated as business travel in many cases, such as travelling to meet your accountant, visit your business bank, or attend a business networking event that is relevant to your trade. The principle is the same: the journey must be wholly and exclusively for business purposes, and you should record the purpose in your mileage log.

If a trip is combined with personal activities, claim only the business portion.

How mileage claims affect your tax bill

Mileage claims reduce your taxable profit. That means they can reduce the amount of Income Tax and National Insurance you pay, depending on your overall profit and tax position. The exact saving depends on your marginal tax rate and how the deduction interacts with your personal allowance and other factors.

For example, if your marginal combined rate of Income Tax and National Insurance is, say, 29%, then a £5,000 mileage deduction might reduce your overall tax and NIC by approximately £1,450. The mileage claim isn’t a rebate; it’s a deduction that lowers the profit figure used to calculate what you owe.

Because the benefit is linked to your tax rate, it’s often worth being disciplined about tracking mileage. Small, frequent business journeys can add up to a meaningful expense over the year, and missing them can mean paying more tax than necessary.

How long should you keep mileage records?

As a practical matter, you should keep your business records—including mileage logs—for an appropriate period in case you need to support your tax return figures. Keeping digital copies, backing them up, and ensuring they are readable later (for example, exporting app data annually) can save headaches. Consistency is important: a clear, maintained log is much easier to defend than one assembled retrospectively.

Practical tips for building a mileage habit

If mileage tracking feels like a chore, a few small systems can make it painless:

- Keep a template in your phone notes with date, from, to, purpose, miles, and copy it for each trip.
- Use a mileage tracking app, but check journeys weekly so you don’t forget what each trip was for.
- If you prefer paper, keep a small notebook in the glovebox and transfer totals monthly into your accounts.
- Record mileage at the point of travel, not weeks later. Memory fades quickly.
- Put a recurring reminder in your calendar to total business miles each month.

The goal isn’t perfection—it’s credibility and consistency. A mileage log that is maintained regularly is far more reliable than one reconstructed at year-end.

When mileage rates are likely to be a good fit

For many sole traders, the simplified mileage rates are a strong choice when:

- The vehicle is used for both business and personal reasons and splitting actual costs would be time-consuming.
- The vehicle is relatively economical, so the mileage rate produces a healthy deduction.
- The business journey pattern is frequent and varied (multiple clients, sites, or jobs), making actual-cost apportionment more complex.
- You value administrative simplicity and want a clear, auditable system.

However, if your vehicle has high costs, low fuel efficiency, or you have unusually high repair bills, the actual-cost method could yield a larger deduction. The “best” approach depends on your specific numbers and how much time you want to spend on record-keeping.

A simple checklist for compliant mileage claims

Before you finalise your tax return, run through this checklist:

- Have you recorded each business trip with date, purpose, and miles?
- Have you excluded commuting and personal detours?
- Have you applied the correct rate for your vehicle type?
- For cars and vans, have you applied 45p for the first 10,000 business miles and 25p thereafter?
- Have you avoided double-claiming actual running costs if you’re using mileage rates?
- Have you kept supporting notes for anything unusual (long trips, temporary workplaces, changes in work base)?
- Have you saved or backed up your mileage records?

If you can answer “yes” to these, your mileage claim is likely to be in good shape.

Conclusion: the key mileage rates and what to do next

UK sole traders can claim mileage using simplified expenses, applying standard rates to business miles travelled in their own vehicles. For cars and vans, the typical rate is 45p per mile for the first 10,000 business miles in the tax year and 25p per mile thereafter. Motorcycles and bicycles have their own lower per-mile rates. The most important element is not the arithmetic—it’s ensuring the miles qualify as business travel and that you keep a clear, consistent record.

If you’re newly self-employed or you’ve never claimed mileage before, a good next step is to choose a tracking method you can stick to (app, spreadsheet, or notebook) and start recording business journeys immediately. If you’re unsure whether mileage rates or actual costs will be better for you financially, you can estimate both approaches using a few months of real data. Once you’ve chosen a method for a vehicle, applying it consistently and keeping solid records will make your tax reporting smoother and give you confidence that your claim is accurate.