Sole Trader Mileage Allowance 2026/27: Rates and How to Claim

Sole trader mileage can be claimed using HMRC’s simplified expenses method. For 2026/27, eligible cars and vans qualify for 55p per business mile for the first 10,000 miles, then 25p. Motorcycles qualify for 24p. The deduction reduces taxable business profit; it is not a payment from HMRC.

For a sole trader travelling to customers, suppliers or changing job sites, the rate is only part of the claim. The journey must qualify, the vehicle must be eligible and your records must support the mileage.

This Accfirm guide explains how to make those decisions and calculate your allowance.

What are the sole trader mileage rates for 2026/27?

The current HMRC mileage rates for simplified vehicle expenses are:

These rates apply to qualifying business mileage. Private mileage does not use up the business mileage band. 

Does the old 45p rate still apply?

Yes, for 2025/26. The first-band rate increased to 55p with effect from 6 April 2026, including qualifying 2026/27 journeys made before the announcement.

A 2025/26 return being prepared during 2026 still uses 45p for the first 10,000 qualifying car or van miles. Check the tax year in your spreadsheet or accounting software. 

What if you use more than one vehicle?

For the same trade, combine relevant mileage from cars and goods vehicles using simplified expenses when applying the 10,000-mile band. A second car does not provide another full higher-rate band. Keep motorcycle mileage separate.

For example, 7,000 qualifying miles in one car and 5,000 in another produce 12,000 relevant miles: £5,500 at the higher rate plus £500 at the lower rate. 

Who can use the mileage allowance for sole traders?

Simplified expenses are optional. Sole traders can use them with either cash basis or traditional accounting, and there is no business income limit. Eligible partnerships can also use the scheme if they have no corporate partners. Limited companies use separate rules. 

Check the vehicle’s tax history before choosing mileage:

• Previous capital allowances can prevent a mileage claim for that vehicle.
• A van or motorcycle whose purchase cost has already been deducted under the cash basis cannot also use simplified mileage.
• Specially designed commercial cars, including black cabs and dual-control driving-instructor cars, are excluded. Ordinary goods vehicles such as vans are eligible vehicle types. 

Once you adopt mileage for a vehicle, continue using that method while the vehicle remains in the business. Review any previous actual-cost claims before changing the treatment. 

Which journeys count as business mileage for a sole trader?

Qualifying travel must be wholly and exclusively for your trade. The purpose and pattern of the journey matter more than the label “client visit”. 

Use this decision table as a starting point:

HMRC excludes private journeys and ordinary home-to-work travel. Its detailed guidance recognises qualifying travel in itinerant trades and warns against converting a commute into a business journey by adding a supplier visit. 

Can you claim mileage from home to a client?

Sometimes. A mobile tradesperson whose work takes them between changing job locations may have an itinerant trade. HMRC’s guidance explains circumstances where home-to-site journeys qualify.

A person travelling regularly from home to an established business base faces a different position. Keeping invoices or tools at home does not automatically make home the business base. 

Do not rely on the employee “24-month temporary workplace” rule for a sole trader claim. That rule belongs to employment travel legislation. Self-employed travel must satisfy the trading expense rules on its own facts. 

What if a journey includes a private detour?

Separate an identifiable business part from private mileage. For example, a 40-mile qualifying customer trip followed by a distinct 6-mile detour to visit a friend supports a claim for the 40 business miles, not 46.

That treatment depends on being able to identify the business part. A journey with inseparable business and private purposes is not automatically deductible simply because you visited a customer. 

How do you calculate your sole trader mileage allowance?

Multiply qualifying business miles by the applicable rate, splitting car and van mileage at 10,000 miles.

The examples below assume tax-year-aligned accounts and an eligible vehicle using simplified expenses.

A motorcycle covering 4,500 qualifying miles produces a deduction of £1,080: 4,500 × £0.24.

These are illustrative calculations, not Accfirm client cases.

Does a £6,000 mileage claim save £6,000 in tax?

No. The deduction reduces the profit used to calculate tax.

If the entire £6,000 deduction reduces income that would otherwise be taxed at 20%, the Income Tax saving is £1,200. The result changes where allowances, tax bands or losses affect the calculation.

The deduction may also reduce Class 4 National Insurance, depending on taxable self-employed profits. It does not create the same saving for every sole trader. 

For car or van mileage of at least 10,000 miles, the 2026/27 rate change increases the deduction by £1,000 compared with the old rates. That is an extra expense deduction.

Different accounting year end: HMRC sets out special calculations where accounting periods span tax years with different rates. Have the profit apportionment checked rather than relying on a journey-date split. 

What does the mileage rate cover?

The flat rate covers normal vehicle acquisition and running costs, including fuel and depreciation. 

Claim qualifying journey costs separately and retain receipts. Fines and penalties are excluded. 

Is mileage or the actual-cost method better?

Compare the permitted tax deductions before committing to a method. Mileage can reduce administration. Actual costs may produce a larger deduction where vehicle costs and qualifying capital allowances are high.

For an owned car using actual costs, calculate the business share of eligible running expenses and assess any available capital allowances separately. Private use restricts the claim. 

Accounting depreciation is not itself a deductible expense when calculating taxable trading profit. Avoid a comparison that adds depreciation as though it were a tax allowance. 

Worked comparison: an eligible car entering the business

Assume:

• 8,000 business miles and 20,000 total miles.
• £7,500 of eligible annual running expenses.
• A separately calculated, valid capital allowance of £1,000 after the private-use restriction.

Mileage produces £400 more deduction in this example. A different capital allowance or cost pattern could reverse the result.

The £1,000 capital allowance is an assumption for comparison, not a standard allowance available to every car owner. Vehicle type, emissions, purchase circumstances and private use affect the actual calculation.

HMRC’s simplified expenses checker can help compare methods, although it gives estimates rather than figures for a tax return and has eligibility restrictions.

How do you claim mileage as a sole trader?

Record qualifying journeys, calculate the deduction and include it in the business expenses reported to HMRC.

1. Check the vehicle and method. Review previous returns for capital allowances, deducted purchase costs or actual-cost claims.
2. Classify the journeys. Exclude private trips and review uncertain home-to-client travel.
3. Total the business miles. Keep vehicle records separate while applying the relevant shared car and goods-vehicle band.
4. Calculate the deduction. Use the correct tax-year rates and add eligible separate journey costs.
5. Record and report the expense. Use the vehicle or travel expense category where your return or software requires detailed categories. Follow the relevant totals approach where simpler reporting applies.

HMRC does not normally require your mileage log with the return. Retain the evidence so you can provide it if requested. For a usual 2026/27 online Self Assessment return, the filing deadline is 31 January 2028. 

A sole trader’s own mileage is a trading expense. Do not treat the claim as an employer reimbursement to yourself.

What mileage records should you keep?

Keep a journey log as you travel. A year-end odometer difference alone cannot show which miles had a business purpose.

A useful log records the date, vehicle, starting point, destination, specific business reason and business miles. Odometer readings or a recorded route help support distance. Add excluded private miles where relevant.

Illustrative entries:

Record enough detail to identify the customer or job in your own records. Keep supporting appointments, invoices and receipts, and make sure the mileage is consistent with the vehicle’s use. 

A spreadsheet, paper log or app can help. Choose a system you will maintain and back up.

How long must you keep the mileage log?

For the normal Self Assessment retention rule, keep records for at least five years after the relevant 31 January submission deadline. For a 2026/27 return filed on time, retain them until at least 31 January 2033.

Can a VAT-registered sole trader reclaim VAT on mileage?

The Income Tax mileage deduction and VAT recovery are separate calculations. Do not take one-sixth of the full 55p rate as input VAT.

Eligible VAT recovery relates to underlying costs, such as business fuel, supported by appropriate evidence. HMRC’s motoring notice explains business/private mileage allocation and other fuel VAT options.

For electric vehicles, a sole proprietor may recover eligible VAT on business charging, including at home, subject to the normal input tax rules and a business-use calculation. 

A mileage log supports the travel claim, but retain the relevant VAT evidence for any input tax recovery.

Can you claim mileage and the £1,000 trading allowance?

You cannot deduct mileage expenses in addition to the trading allowance for the same trade. Where eligible, compare the allowance with the total deductible expenses you would otherwise claim. 

For example, suppose a side business has £900 of qualifying mileage and £500 of other allowable expenses. The combined expense deduction is £1,400, compared with a £1,000 trading allowance.

Compare all relevant expenses, rather than mileage alone. Consider any restrictions on eligibility for the allowance before choosing.

How does Making Tax Digital affect mileage claims?

MTD changes how affected sole traders keep records and report tax information. It does not make private mileage deductible.

Subject to exemptions, sole traders and landlords with qualifying income over £50,000 in 2024/25 must use MTD for Income Tax from 6 April 2026. Later entry dates apply to lower qualifying-income bands. 

Qualifying income is relevant self-employment and property income before expenses. A mileage deduction therefore does not lower income for the MTD entry test. 

HMRC’s digital-record guidance specifically addresses simplified expenses. If you are sure you will use the scheme, you do not need digital records of the actual costs replaced by it. You must make the simplified-expenses adjustment before finalising your Income Tax position. Keep the mileage evidence supporting that adjustment. 

Frequently asked questions about sole trader mileage

Can you claim mileage for a car bought before becoming self-employed?

Owning the car before starting your trade does not, by itself, prevent a claim. Review its previous business tax treatment and the journeys you now make. A vehicle already relieved through another method needs particular care. 

Can you use simplified mileage for an electric car?

Yes, if the electric car meets the scheme’s eligibility conditions. The car and goods-vehicle table does not set a lower rate for electric cars. Charging costs are covered by the flat-rate claim rather than added as another Income Tax vehicle expense. 

Can a sole trader claim 20p per mile for cycling?

The employee bicycle rate should not be imported into a sole trader simplified-expenses claim. The statutory scheme covers cars, motorcycles and goods vehicles. Consider eligible actual bicycle costs and their tax treatment instead.

Can a sole trader add 5p per mile for a passenger?

No, not to their own simplified mileage claim. HMRC states that the number of people in the vehicle does not affect the rate. Employee passenger-payment provisions are a different rule. 

What if you charge a client for your mileage?

Record the amount charged as business income and calculate your own allowable travel deduction separately. The commercial rate agreed with the client does not determine HMRC’s expense deduction. 

If you are VAT registered and supplying a taxable service, recharging your own travel normally forms part of the taxable charge. Showing travel separately on an invoice does not turn your expense into a VAT disbursement. 

How can Accfirm help with your mileage claim?

Accfirm can help you review uncertain journeys, check your vehicle’s previous tax treatment and compare mileage with eligible actual costs.

Bring your mileage log, vehicle cost records and previous tax returns to the review. Those records provide the starting point for a supportable claim.