If you use your own car for work, you’re probably spending more than you realise. Fuel, wear and tear, those quick trips between clients… it all adds up. The good news is you can claim business mileage as an expense.
And in many cases, it’s one of the simplest ways to reduce your tax bill in the UK.
- But what actually counts?
- How do you track it properly?
- And how do you claim business mileage?
In this guide, we’ll walk through how to claim business mileage for the 2026/27 tax year in detail.
Let’s get into it!
What Counts as Business Mileage?
Business mileage is any journey you make wholly and exclusively for work. This includes:
- Driving to visit a client or customer
- Travelling to a temporary workplace (somewhere you work for less than 24 months)
- Travelling between two different work locations
- Going to a meeting, conference, or training event that isn’t your usual place of work
- Collecting business supplies or making a work-related delivery
What does NOT count:
- Your normal commute (home to your regular workplace)
- Personal trips, even if you stop for something work-related
So if you’re wondering what are business miles or what is classed as business mileage HMRC, remember: If the trip wouldn’t happen without your work, it likely counts.
The 2026/27 HMRC Mileage Rates
The amount you can claim for business mileage depends on the type of vehicle. It also depends on the total number of business miles driven during the tax year. For 2026/27, these are the rates. Use these to calculate your business mileage claim.
| Vehicle Type | First 10,000 Miles | Over 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 |
You can claim for business mileage an extra 5p per mile for each work colleague you carry as a passenger on a business trip. Also, electric cars use the same 45p/25p rate as petrol and diesel cars.
How to Claim Business Mileage: Employed vs Self-Employed
The process to claim business mileage is a little different depending on your working situation. Let’s break it down.
How to Claim Business Mileage if You’re an Employee
If you are an employee, you need to use the fixed mileage rates. Most people use the 45p per mile rate. Because it is much easier to track. You just need to keep a log of your business miles.
Usually, your boss will pay you back for the miles you drive. If they pay you the full 45p, then great. You will not have to do anything. Also, it is not taxable. But many employers only pay 25p or 30p per mile. If that is you, you can actually claim business mileage relief on the difference.
For example, if your company pays you 30p, you can claim for business mileage the 15p “shortfall” back from HMRC.
- If your claim is under £2,500, you can usually just fill out a P87 form online.
- If your claim is over £2,500, you will need to register for and file a full tax return.
Just remember that the 45p rate applies to the first 10,000 miles. And after that, the rate drops to 25p.
How to Claim Mileage as a Sole Trader
If you are self-employed, you have two ways to handle car costs.
- You can use the “actual costs” method, or
- You can use the “simplified expenses” method.
Actual costs mean you tally every receipt for fuel, insurance, and repairs. You then claim the business percentage of that total. It is a paperwork nightmare. But you can save more if your car is expensive to run.
Simplified expenses lets you just claim business mileage at 45p per mile for your business trips. You will need to maintain a detailed mileage log. Yes, for all business journeys. Most people pick this because it’s fast and easy.
How to Claim Business Mileage Through a Limited Company
If you run a limited company, the process to claim business mileage works slightly differently. You still use the same HMRC rates. But instead of claiming business mileage on a personal tax return, you submit a mileage expense claim to your company. Then the company reimburses you.
The reimbursement is a tax-deductible cost for the business. And it is tax-free for you personally, up to the HMRC rate.
You basically have two ways to handle the costs:
You can use the “reimbursement” method. This is for when you use your own personal car for work. You pay yourself 45p per mile for the first 10,000 miles (and 25p thereafter) from the company bank account. It’s simple and keeps the car off the company books. It also avoids extra tax charges.
You can use the “company car” method. This is where the company owns or leases the vehicle. And then pays for everything like fuel and insurance directly. While the company gets more tax relief, you will likely face a “Benefit in Kind” tax bill. This is usually only worth it in 2026/27 if you are driving a low-emission or electric vehicle.
Can I Claim Business Mileage From Home?
Yes, you can claim business mileage from home. But only if your home is your “base of operations”. The ones who fall into this category are usually freelancers who work from home.
But in case you just work from home once a week and have a dedicated office elsewhere, your home is not your official workplace. In that case, the journey to the office is still a commute. You generally can’t claim the home-to-office journey as business mileage.
How to Track Business Mileage?
If you don’t track, you can’t claim business mileage. For each business journey, you should note down:
- The date of the trip
- Where you started from and where you went
- The reason for the journey (e.g. “client meeting — ABC Ltd, Bristol”)
- The number of miles driven
From April 2026, self-employed individuals and landlords with qualifying income over £50,000 may need to keep digital records under Making Tax Digital (MTD) rules.
Can You Claim VAT on Business Mileage?
If your business is VAT registered, you can reclaim some VAT on the fuel portion of your mileage. You cannot claim VAT on the full 45p. That 45p covers things like insurance and wear and tear. And this does not have VAT.
For petrol or diesel, this is based on HMRC’s Advisory Fuel Rates (AFRs). To calculate this, you use the “fuel element” of the mileage rate. VAT can only be reclaimed on the fuel element of your mileage claim, not the full HMRC mileage allowance, because the full rate also covers maintenance, insurance, and depreciation. And for electric vehicles, you use the Advisory Electricity Rate (AER).
To do the maths, take the fuel rate for your engine size and apply the current VAT fraction (which is 1/6th if the VAT rate is 20%). Then multiply this by your business miles.
Note: You must keep fuel receipts to prove you actually bought the fuel.
Do I Need Business Insurance to Claim Mileage?
HMRC mileage rules and insurance rules are different things. Technically, HMRC doesn’t check your insurance policy before letting you claim business mileage. However, from a legal and financial perspective, yes, you absolutely need it.
If you are using your car for work (other than commuting) and you only have “Social, Domestic and Pleasure” insurance, you might not be covered if you have an accident. Therefore, always check your policy. Most insurers let you add “Business Use” for a very small fee. And it also keeps you legal.
How Do I Claim Business Mileage From HMRC if My Employer Doesn’t Pay?
If your employer pays you less than the approved 45p per mile or nothing at all, you can claim tax relief on the difference. As mentioned earlier, if your claim is under £2,500, you can usually just fill out a P87 form online. But if you have already filed a tax return for other things, like being a landlord, you have to use Self Assessment instead.
If your claim is over £2,500, you will definitely need to register for and file a full tax return to claim business mileage.
How to Calculate Mileage for Business Travel Accurately?
The best way is to record your odometer reading at the start and end of every business trip. If you forget, use a reliable tool like Google Maps. This is to check the distance.
HMRC expects you to claim for the shortest or most reasonable route. Therefore, if you take a longer way due to major roadworks or a closure, make a note of why that specific route was necessary. This helps you claim business mileage and justify the extra miles if you are ever audited.
When Can I Claim Mileage for Work?
As discussed, you can claim business mileage for work when using your personal vehicle (car, van, motorcycle, bicycle) for business-related travel. This includes visiting clients, attending meetings, or going to a temporary workplace. You cannot claim business mileage for regular daily commuting to a permanent office.
How to Claim Business Mileage Allowances Being Sole Trader?
For a sole trader, there are two ways to claim a business mileage allowance:
- Subtract your mileage from the total distance you drove
- Use the simplified expense method – calculate it like an employee claiming for the use of a personal car
Example #1:
Josh spent £2200 as fuel expense for his car. He used 300 miles for business reasons and 700 miles for personal use. You can easily calculate it as 300/700=0.428, then multiply it with total fuel cost 0.428 * £2200= £943.8 he can claim a mileage allowance.
Example #2:
If he drives 11,000 miles in a year. He can claim £4,750 (10,000 x £0.45 + 1,000 x £0.25 = £4,750).
Records Required for Business Mileage:
HMRC will inspect the entire travel process and expenses during their audit. They may also reject your claim if you lack solid evidence. So you need to maintain the following records:
- Records showing the trip’s dates and time
- Start and end locations
- Drove Miles
- Trip’s purpose
- The amount you are claiming
To avoid miscalculations and unwanted fines, HMRC recommends you store these records for five years.
The Bottom Line
To claim business mileage properly, keep good records and make sure the journey was actually for business. Also, use an app if that’s easier to claim business mileage and know what counts and what doesn’t. And if you’re self-employed, make sure you’re putting it through your Self Assessment every year rather than letting it slip.
How Accotax Can Help
If you need help to claim business mileage or with any accounting service, such as bookkeeping, VAT, or year-end accounts, visit Accotax.
We offer a range of packages designed to fit your unique needs.
Reach out, get an instant quote, and let us help you stay compliant!
Disclaimer: All the information provided in this article on How to Claim Business Mileage? including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.
