Self-employed car and van expenses
Sole traders can claim either a flat 55p a business mile (25p after 10,000 miles) or a share of the vehicle's actual running costs. See which gives the bigger deduction, and when Making Tax Digital applies to you.
Bigger deduction
Flat rate per mile
- Flat rate (55p, then 25p)
- £4,400
- Actual costs × 67% business use
- £2,333
Actual costs can also include capital allowances on the vehicle itself, which can tip the balance for an expensive or electric van. Once you choose the flat rate for a vehicle, you must stick with it for as long as you use that vehicle.
Flat rate or actual costs?
The flat rate (simplified expenses) is 55p a mile for the first 10,000 business miles in 2026/27 and 25p after that, rising to 35p from 6 April 2027 (Budget 2026); motorcycles are 24p. It covers everything: fuel, insurance, servicing and depreciation. The flat rate tends to win for cheap, economical cars doing lots of business miles; actual costs win for expensive vehicles, high running costs or mostly-business vans, especially once you add capital allowances.
Partnerships with no companies as partners can use the flat rate too; limited companies can't. You can't use it for a vehicle you've already claimed capital allowances on, and once you start with the flat rate you must keep using it for that vehicle.
Making Tax Digital for Income Tax
| Qualifying income over | Must use MTD from |
|---|---|
| £50,000 | 6 April 2026 |
| £30,000 | 6 April 2027 |
| £20,000 | 6 April 2028 |
Qualifying income is your self-employment and property income before expenses. Under MTD you keep digital records and send quarterly updates using compatible software. Employees using their own car should use the mileage allowance calculator instead.
Rates for 2026/27, checked against the official sources on : GOV.UK simplified expenses for vehicles, GOV.UK self-employed National Insurance and GOV.UK Making Tax Digital for Income Tax. Tax rules can change at a Budget; we update these tools when they do.
Frequently asked questions
›What is the self-employed mileage rate?
55p a mile for the first 10,000 business miles in a tax year, then 25p, for cars and vans (2026/27). From 6 April 2027 the rate above 10,000 miles rises to 35p. Motorcycles are 24p a mile. It was 45p until April 2026.
›Can I claim mileage and fuel?
No. The flat rate covers fuel and every other running cost. To claim fuel you'd use actual costs instead, for the business share.
›When do I have to use Making Tax Digital?
From 6 April 2026 if your qualifying income is over £50,000, 6 April 2027 if over £30,000, and 6 April 2028 if over £20,000.