How much can a sole trader claim per mile in 2026/27?

Using HMRC's flat rate (simplified expenses), 55p a mile for the first 10,000 business miles, 25p a mile after that, for cars and goods vehicles; 24p a mile for motorcycles. It rose from 45p in April 2026. You put the total on your Self Assessment as a business expense.

Is the mileage claim a cash refund?

No. It is a deduction from your business profit, not a refund. So you do not get the whole amount back — you save the Income Tax and Class 4 National Insurance you would have paid on that profit, at your marginal rate. On a 1,100 pound claim, a basic-rate (20%) sole trader saves roughly 220 pounds of Income Tax, plus some Class 4 NIC.

Can I use the flat rate if I have claimed capital allowances on the car?

No. You cannot claim simplified expenses (the flat mileage rate) for a vehicle you have already claimed capital allowances for, or included as an expense when working out your business profits. That vehicle is committed to the actual-costs method. And once you use the flat rate for a vehicle, you must keep using it for that vehicle for as long as it is in the business — so choose before you claim.

Does Making Tax Digital affect a sole trader's mileage?

Yes — Making Tax Digital for Income Tax is aimed at the self-employed and landlords. It phases in by income: 50,000 pounds from April 2026, 30,000 pounds from April 2027 and 20,000 pounds from April 2028. Above the threshold it means digital record-keeping and quarterly updates instead of one annual return, so a clean, contemporaneous mileage log matters more than ever.

UK rules · 2026/27 · every rule sourced

Claiming Mileage as a Sole Trader (the Self Assessment route)

Q: Flat rate or actual costs — which should a sole trader use?

The flat rate (simplified expenses) is a single figure per mile that covers fuel, servicing, insurance and depreciation in one number, with no receipts to itemise. Actual costs means totting up what the vehicle really cost, claiming the business-use share plus capital allowances — more paperwork, occasionally more money on a costly vehicle. For most low-mileage, desk-based sole traders the flat rate is simpler and cleaner.

If you’re self-employed and use your own car for work, you can turn your business miles into a deduction on your Self Assessment — without keeping a single fuel receipt. Here’s the flat-rate method, the one catch that trips people up, and what it’s actually worth. Every rule links to GOV.UK.

Short answer: you can claim a flat 55p a mile for your first 10,000 business miles (25p after; 24p for motorcycles) and put the total straight on your Self Assessment as a business expense. It’s a deduction from your profit, not a cash refund — so what you save is the tax on it at your rate. The alternative is totting up actual running costs, but for most sole traders the flat rate is simpler and keeps the paperwork out.

By Alpesh Patel, Keepwright · published 3 July 2026

The two ways to claim

As a sole trader, HMRC gives you two ways to claim the cost of running your own vehicle for work — and you pick one per vehicle:

Simplified expenses (the flat rate). A single figure per mile that’s meant to cover everything — fuel, servicing, insurance, repairs, depreciation — in one number. You count business miles and multiply. Nothing to itemise. This is HMRC’s simplified-expenses method for vehicles.
Actual costs. You add up what the vehicle actually cost across the year (fuel, insurance, servicing, repairs), claim the business-use proportion, and claim capital allowances on the vehicle itself. More paperwork — occasionally more money if you run an expensive vehicle hard.

For most desk-based sole traders doing local visits, the flat rate wins on simplicity — and it’s the method this guide is about.

The flat rate, and what it saves

For 2026/27 the rate is 55p a mile for your first 10,000 business miles, then 25p; motorcycles are 24p a mile. (It rose from 45p in April 2026 — worth knowing if you’re still working off the old number.) The maths is just business miles × the rate:

Your business miles	Deducted from your profit	Income Tax saved (20% / 40%)
2,000 miles	2,000 × 55p = £1,100	~£220 / ~£440
5,000 miles	5,000 × 55p = £2,750	~£550 / ~£1,100
12,000 miles	(10,000 × 55p) + (2,000 × 25p) = £6,000	~£1,200 / ~£2,400

Two things worth being plain about. First, it’s a deduction from your profit, not a refund — you don’t get the £1,100 back, you save the Income Tax (and Class 4 National Insurance) you’d otherwise have paid on it, at your marginal rate. Second, the 10,000-mile step resets each tax year, and most low-mileage sole traders never reach it — which is rather the point. It’s not the high-mileage drivers who lose out; it’s the ones who don’t bother logging the small local trips.

The one catch: capital allowances

Here’s the rule that catches people. You can’t use the flat rate for a vehicle you’ve already claimed capital allowances for, or included as an expense when working out your profits. In plain terms: if you’ve written the car down as a business asset, that vehicle is committed to the actual-costs method — you can’t also take the flat mileage rate on it.

And it’s a one-way door per vehicle: once you use the flat rate for a vehicle, you have to keep using it for that vehicle for as long as it’s in the business. So the choice matters at the start. For a car you already owned before going self-employed, or a modest runaround you’d rather not depreciate on the books, the flat rate is usually the clean choice — but decide before you claim, because you can’t switch it later.

Where it goes, and what HMRC wants to see

The claim goes on the self-employment pages of your Self Assessment (the SA103), as part of your allowable business expenses — it reduces your taxable profit. What sits behind it is a record of the journeys: the date, where you went, the business reason, and the miles. Not a shoebox of petrol receipts — the per-mile rate is designed to replace those. (One exception: if you’re VAT-registered and reclaiming the VAT on your fuel, you keep fuel receipts too, to cover the VAT you reclaim — VAT Notice 700/64.)

Business journeys only, of course — to a client, supplier, job or temporary site. Your ordinary commute between home and a regular workplace doesn’t count. The drive to a local client does — and that’s exactly the trip most people forget to write down.

Making Tax Digital is coming — and it’s aimed at you

If you’re an employee, Making Tax Digital doesn’t apply. If you’re a sole trader, it’s aimed squarely at you. It phases in by income: £50,000 from April 2026, £30,000 from April 2027, and £20,000 from April 2028.

Above the threshold, it means digital record-keeping and quarterly updates instead of one annual return — so a clean, contemporaneous mileage log stops being a nicety and becomes something you file four times a year. A number half-guessed in January won’t survive that. Whichever threshold catches you, the habit is the same: capture the journeys as they happen.

Common questions

How much can I claim per mile in 2026/27?

Using HMRC’s flat rate (simplified expenses): 55p a mile for the first 10,000 business miles, 25p after, for cars and goods vehicles; 24p for motorcycles. It rose from 45p in April 2026. The total goes on your Self Assessment as a business expense.

Is it a cash refund?

No — it’s a deduction from your profit, not a refund. You save the Income Tax and Class 4 National Insurance you’d have paid on that profit, at your marginal rate. On a £1,100 claim, a 20% taxpayer saves roughly £220 of Income Tax, plus some Class 4 NIC.

Can I use the flat rate if I’ve claimed capital allowances on the car?

No. You can’t claim simplified expenses for a vehicle you’ve already claimed capital allowances for, or included as an expense when working out your profits — that vehicle is on the actual-costs method. And once you use the flat rate for a vehicle, you must keep using it for that vehicle. Choose before you claim.

Flat rate or actual costs — which should I use?

The flat rate covers fuel, servicing, insurance and depreciation in one per-mile figure, with nothing to itemise. Actual costs means totting up what the vehicle really cost, claiming the business-use share plus capital allowances — more work, occasionally more money on a costly vehicle. For most low-mileage, desk-based sole traders, the flat rate is simpler and cleaner.

Does Making Tax Digital affect me?

Yes — MTD for Income Tax is aimed at the self-employed and landlords. It phases in at £50k (April 2026), £30k (April 2027) and £20k (April 2028), and means digital records plus quarterly filing instead of one annual return.

Work out your own figure

Put your business miles into the free UK mileage calculator to see the approved amount, then read the full UK mileage allowance rules. Run a company instead? See claiming mileage through your limited company; an employee? claiming mileage tax relief as an employee. Mileage Tracker keeps the journey log on your phone, pay-once — ready to drop straight onto your Self Assessment.

This is general information, not tax advice. Rules and rates can change and were correct at publication (3 July 2026) — check your own position with HMRC or your accountant. Sources are linked throughout.