If you run a business as a sole trader and use your own car, van or motorcycle for work, the mileage you clock up is more than just wear on the tyres. It is a legitimate business expense, and claiming it correctly can reduce your tax bill without a mountain of receipts. HMRC offers a straightforward method called simplified expenses, which uses flat rates per mile. Simple in principle, but the detail matters. Get the records wrong, or use the wrong rate, and you could overstate your claim or leave money on the table.

This guide walks through how the mileage allowance works, what counts as a business journey, how to keep records that survive scrutiny, and the point at which claiming actual costs makes more sense.

What the Simplified Expenses Mileage Rates Cover

HMRC publishes flat rates for vehicles used in a trade. You apply them to the number of business miles you drive in the tax year. The rates are designed to cover fuel, servicing, repairs, insurance, road tax and depreciation all in one figure, so you do not claim those costs separately.

For cars and vans, the rates for the 2024/25 tax year are:

• 45p per mile for the first 10,000 business miles
• 25p per mile for every business mile above 10,000

Motorcycles attract a flat 24p per mile, with no taper. For bicycles, it is 20p per mile. The taper on cars and vans is a common trip-up. Once your business mileage passes 10,000 in the year, every additional mile is worth less, so the total claim does not simply rise in a straight line.

If you give a colleague or employee a lift on a business journey, you can claim an extra 5p per passenger per mile in a car or van. You cannot claim this for motorcycles or bicycles.

What Counts as a Business Journey

A business journey is travel you make wholly and exclusively for the trade. That includes visiting clients, driving to a supplier, travelling between two sites, or going to a temporary workplace. It does not include ordinary commuting between home and your usual place of work, and it does not include personal trips.

For many sole traders, home is the base. If you work from home and travel out to see customers, those journeys are generally business travel. If you have a separate workshop or office you attend most days, the trip from home to that base is commuting and cannot be claimed. The distinction is based on where your work is, not on how you label the trip.

Pool cars and mixed use

Simplified expenses work on business miles only. If you use the same car for the school run and the weekly shop, you simply do not count those miles. No need to apportion fuel receipts or work out what percentage of the car is business use. That is the appeal, and it is also why the mileage log must be honest and complete.

How to Keep Records HMRC Will Accept

HMRC expects you to be able to show that the miles you claim were genuinely business journeys. A diary or spreadsheet is fine. What matters is that each entry lets you identify the date, the purpose, the start and end points, and the miles driven.

A robust mileage log usually contains:

• Date of the journey
• Start location and destination
• Reason for the trip, such as the client or supplier visited
• Miles covered, taken from the odometer at the start and end
• Whether passengers were carried on business, if you are claiming the extra 5p

Apps and spreadsheets can make this quick, but a notebook kept in the glovebox works just as well. The mistake to avoid is trying to reconstruct a year of mileage from memory in January. HMRC can ask for records up to six years after the tax year, so a habit of logging trips as they happen saves a lot of stress later.

Keep your MOT certificates, service records and insurance documents too. They are not part of the simplified expenses calculation, but they help demonstrate the vehicle existed and was used as you describe if questions arise.

Simplified Expenses Versus Actual Costs

You do not have to use simplified expenses. The alternative is to claim the actual running costs of the vehicle and work out the business proportion. That could include fuel, insurance, repairs, servicing, road tax and, in some cases, capital allowances on the vehicle itself. You would then apportion those costs between business and private use.

The simplified method tends to suit:

• Sole traders doing modest business mileage with a car used for personal trips too
• Anyone who wants to avoid keeping fuel receipts and apportioning bills
• Those who prefer a predictable figure they can calculate from a mileage log

Claiming actual costs can be better if your business mileage is high, if the vehicle is expensive to run, or if you have bought a vehicle and want to use capital allowances. A van used almost entirely for the trade may well cost more to run than the flat rate repays, for example. The trade-off is more paperwork and a need to apportion every cost accurately.

You cannot mix and match

Once you use simplified expenses for a vehicle, you must keep using it for that vehicle for as long as it is used in the business. Switching to actual costs partway through is not allowed. You also cannot claim simplified expenses and capital allowances on the same vehicle at the same time. Choose with your eyes open, because reversing the decision later is not straightforward.

Practical Points That Save Time and Tax

Use the same mileage rate consistently across the year, and calculate the taper at the point you cross 10,000 miles rather than applying 45p to everything. If you have two vehicles, each one has its own 10,000-mile threshold, so a car and a van are treated separately.

Claim the passenger payment only when the person travelling with you is on business too. It is not for family members tagging along.

Record your opening and closing odometer readings at the start and end of the tax year. These give a useful cross-check. If your business mileage looks implausibly high against total mileage, that is a red flag for you as much as for HMRC.

If you are unsure whether a journey qualifies, write down the facts at the time. A note explaining who you met and why is far more persuasive than a vague entry months later.

Bringing It Together

Mileage claims reward good habits. Log every business journey as it happens, apply the correct rate including the taper above 10,000 miles, and keep the records for at least six years. For most sole traders with a car used for both work and private life, simplified expenses offer a clean, defensible way to claim the cost of getting to clients and suppliers. If your mileage is heavy or your vehicle is costly to run, run the numbers on actual costs before you commit, because the choice is not easily undone. Tax rules and rates do change, so check the current HMRC guidance or speak to an accountant before filing.

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