What mileage rates can self-employed drivers claim?

Self-employed drivers can claim a fixed rate per business mile driven using their own vehicle, currently set by HMRC at 45 pence per mile for the first 10,000 miles and 25 pence per mile thereafter in a tax year. These rates simplify claiming tax relief without tracking actual running costs.

Understanding the exact rates, what counts as a business journey and the records you must keep helps you stay compliant while maximising legitimate claims. This guide explains the practical steps UK founders and e-commerce sellers who drive for their business should follow.

HMRC approved mileage rates

HMRC publishes set rates that self-employed individuals and company directors can use when claiming for business use of their own car, van or motorcycle. These rates are designed to cover fuel, insurance, servicing, depreciation and other running costs without the need to calculate each expense separately.

Cars and vans: 45 pence per mile for the first 10,000 business miles in the tax year, then 25 pence per mile for additional miles.
Motorcycles: 24 pence per mile for all business miles.
Bicycles: 20 pence per mile for all business miles.

These figures can change, so always check the latest rates on GOV.UK before making a claim. The same rates generally apply for both self-assessment taxpayers and directors claiming through a limited company, although the way the claim is made differs.

What journeys count as business mileage

Only miles driven for business purposes qualify. Typical allowable journeys for early-stage founders and e-commerce sellers include travelling to:

Meet suppliers or manufacturers
Visit customers or stockists
Attend markets, trade shows or networking events
Make deliveries of your own products (when not using a courier)
Travel between your home office and a temporary business location

Commuting from home to a regular place of work is not usually allowable. If you work from home and drive to a client meeting or to collect stock, that journey can normally be claimed in full. Keep the purpose of each trip clear in your records to demonstrate it was necessary for the business.

Record-keeping requirements

HMRC expects clear, accurate records that show the date, purpose, starting point, destination and number of miles for every business journey. You do not need to submit these records with your tax return, but you must keep them for at least six years in case of an enquiry.

Practical ways to record mileage include:

A dedicated mileage logbook (paper or spreadsheet)
Apps that use your phone's GPS to track journeys automatically
Keeping a simple note immediately after each trip

Each entry should include the total business miles claimed and, where relevant, the rate applied. If you sometimes carry passengers for business, note their names and the reason. For e-commerce sellers who combine a delivery with a personal errand, only the direct business portion of the trip can be claimed.

Calculating and claiming your mileage

Multiply the business miles driven by the appropriate rate. Example: if you drive 7,200 business miles in a tax year using a car, the claim would be calculated at 45 pence per mile. If you later drive an additional 4,800 miles, the first 2,800 stay at 45 pence and the remaining 2,000 move to the 25 pence rate.

For self-employed individuals the total is deducted as an expense on your Self Assessment tax return. Directors of limited companies can claim the mileage through the company, either as a reimbursement that is not subject to tax and National Insurance (provided the rate does not exceed the HMRC figure) or by claiming it personally. Check current GOV.UK guidance because the exact treatment and any reporting requirements can change.

Do not claim both mileage and actual running costs for the same vehicle in the same tax year. Choose one method and stay consistent.

Common pitfalls and how to avoid them

Many new founders overestimate allowable miles by including commuting or private journeys. Others lose out by failing to keep sufficient detail, making it impossible to support the claim if HMRC asks questions. Rounding mileage figures to the nearest ten miles without evidence is risky.

Keep fuel receipts only if you are claiming actual costs instead of the mileage rate. When using the mileage rate, receipts are not normally required for the vehicle costs themselves, but you should still keep evidence of the business activity (such as meeting notes, orders fulfilled or delivery records).

If your business grows and you buy a second vehicle, each vehicle needs its own separate mileage records. The 10,000-mile threshold applies per driver, not per vehicle.

Using accounting software and templates

Spreadsheets remain popular because they are simple. Create columns for date, start location, destination, purpose, miles driven, rate used and amount claimed. Sum the amounts at the end of the tax year and transfer the total to your tax return or company accounts.

Many cloud accounting platforms have built-in mileage trackers or allow you to upload a CSV file of journeys. Whichever tool you choose, make sure you can easily export the data and that it contains all the details HMRC would expect to see. Review your log monthly so errors do not build up. This habit also helps you notice patterns, such as which activities generate the most driving, allowing better planning of routes and pricing.

When to seek extra help

If your driving patterns are complex (for example, you regularly use multiple vehicles, employ drivers, or mix personal and business use heavily), consider speaking to an accountant who understands e-commerce and startup finances. They can confirm your records meet requirements and advise on the most appropriate claiming method each year.

Founders based in West Yorkshire can also explore free support at Loomworks in Liversedge, which offers selected early-stage founders desks, a registered address and mentoring without fees or equity taken. Their operators can point you toward reliable bookkeeping practices that keep your mileage claims straightforward.

Remember that rates, thresholds and allowable expenses can change, so regularly check official GOV.UK and HMRC resources rather than relying on older information.

Frequently asked questions

Can I claim mileage if I use my van for deliveries?

Yes. Business deliveries using your own van qualify for the HMRC mileage rates. Keep a clear record of each delivery journey, including the goods carried and the customer or market. Only the business portion of any trip can be claimed. Check current rates on GOV.UK each tax year.

Do I need to keep fuel receipts when claiming mileage rates?

No. The approved mileage rate is designed to cover all running costs including fuel. You only need detailed journey records. Keep fuel receipts only if you decide to claim actual expenses instead of the flat rate. Choose one method per vehicle per tax year.

What happens if I exceed 10,000 business miles in a year?

The first 10,000 miles are claimed at the higher rate and any miles above that threshold use the lower rate. Accurate records showing the cumulative total are essential. Many accounting packages automatically apply the correct rate once the threshold is reached.

Can limited company directors claim the same mileage rates?

Yes. Directors can be reimbursed by the company at the HMRC mileage rates without creating a taxable benefit, provided the rates are not exceeded. The company claims the cost as an allowable expense. Always confirm the latest treatment with current HMRC guidance.

How long do I need to keep my mileage records?

HMRC requires you to keep business mileage records for at least six years from the end of the relevant tax year. Digital records are acceptable if they contain all required information and cannot be easily altered. A simple, consistent system works best.