Sole Trader Mileage Expenses: What Can You Claim?

If you run your own business as a sole trader in the UK and use your vehicle for business purposes, you can claim mileage expenses to reduce your taxable profits when completing your Self Assessment tax return. It is important to understand exactly what you can claim and how to do so correctly.

What Mileage Expenses Can You Claim?

As a sole trader, you can claim for the business use of your vehicle in one of two ways:

Using the simplified expenses method (flat rate mileage allowance)
Claiming actual vehicle costs

The most common and straightforward approach is to use the flat rate mileage allowance, which covers fuel, insurance, maintenance, and depreciation. This method avoids the need to keep detailed receipts for all vehicle-related expenses.

The Flat Rate Mileage Allowance

HM Revenue & Customs (HMRC) sets approved mileage rates that you can claim per business mile:

Up to 10,000 miles per tax year: 45p per mile
Over 10,000 miles per tax year: 25p per mile

These rates apply to cars and vans. If you use a motorcycle or a bicycle for business journeys, different rates apply: 24p per mile for motorcycles and 20p per mile for bicycles.

Example: If you drove 8,000 business miles in your car during the tax year, you can claim 8,000 × 45p = £3,600 as a mileage expense.

What Counts as a Business Journey?

You can only claim mileage for journeys made wholly and exclusively for business purposes. This includes:

Travelling between different business locations
Visiting clients or suppliers
Driving to temporary work sites

However, journeys between your home and your regular workplace are usually considered commuting and are not allowable mileage expenses.

Claiming Actual Vehicle Costs

Alternatively, you can claim the actual costs of running your vehicle, including:

Fuel
Insurance
Repairs and servicing
Vehicle tax
Depreciation or leasing costs

If you choose this method, you must keep detailed records and receipts of all expenses. You then claim the portion of these costs that relate to your business use, based on mileage or another reasonable method.

Note: You cannot mix the flat rate mileage allowance and actual costs for the same vehicle in the same tax year.

Record Keeping

Whichever method you use, you must keep accurate records of your business mileage and expenses. For the flat rate method, keep a mileage log with dates, miles travelled, and business purpose. For actual costs, retain all receipts and invoices.

Exceptions and Special Cases

If you use your vehicle partly for personal use, only claim the business proportion of mileage or expenses.
If you have more than one vehicle, you can claim mileage expenses for each, but records must be kept separately.
The flat rate mileage allowance cannot be claimed for vehicles owned by a company or for partnership vehicles where you are a partner.

For any uncertainties or specific circumstances, you should consult HMRC guidance or contact them directly to ensure your claims comply with current rules.

Official reference: https://www.gov.uk/self-assessment-tax-returns. Topic-specific official guidance. Always check the latest official guidance. Related forms: Browse our form category.

Important: This article provides general information. Government rules, forms and procedures can change, and this article may not reflect the latest updates. Check current GOV.UK guidance or the relevant authority before relying on it. ITG & Co. is independent and is not affiliated with a government department.