Can I Claim Mileage Allowance When Using My Own Vehicle?
If you use your own personal car, van, motorcycle, or even a bicycle for business purposes, you may be eligible to claim a mileage allowance. Whether you’re self-employed, an employee, or the director of your own limited company, knowing what you can claim and how to do it correctly is essential for maximising your tax efficiency and staying compliant with HMRC.
In this blog post, we’ll break down:
- Who can claim mileage allowance
- Which journeys qualify
- HMRC’s approved mileage rates
- How to record your mileage correctly
- The differences for self-employed individuals vs limited company directors
- Common pitfalls and how to avoid them
Who Can Claim Mileage Allowance?
Mileage allowance is designed for individuals who use their own personal vehicle for business-related travel. This includes:
- Self-employed individuals such as sole traders and freelancers
- Employees using their own vehicle for work-related travel
- Company directors using a personal car for business activities
Mileage allowance does not apply to journeys made in a company-owned car, which is instead covered by different rules involving fuel benefit charges and P11D reporting.
What Qualifies as Business Mileage?
You can claim mileage allowance for business journeys only, not for private trips or commuting to your regular workplace.
Allowed (Business Use)
- Travelling to visit clients or suppliers
- Attending off-site meetings or events
- Trips between two workplaces (e.g. from one client to another)
- Business-related errands (e.g. collecting stock or equipment)
Not Allowed (Personal Use)
- Commuting from home to your normal workplace
- Personal journeys, even if taken during the workday
- Travel from home to a temporary workplace that becomes regular
The key is that the journey must be wholly and exclusively for business purposes.
HMRC Approved Mileage Rates (2025/26)
HMRC sets Approved Mileage Allowance Payments (AMAPs) for those using their own vehicle for business travel. These are the maximum rates that can be claimed tax-free.
| Vehicle Type | First 10,000 miles | Over 10,000 miles |
|---|---|---|
| Cars and Vans | 45p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
These rates include the costs of:
- Fuel
- Wear and tear
- Servicing and maintenance
- Insurance and road tax
You cannot claim separately for fuel, insurance or repairs if you’re using these mileage rates.
Self-Employed: Claiming Mileage as a Business Expense
If you’re self-employed and using your own vehicle, you have two options when claiming for business travel:
1. Simplified Expenses (Mileage Method)
You keep a log of business miles and claim them at HMRC’s approved rates.
Example:
If you drove 6,000 business miles in 2025/26 in a car:
- 6,000 miles × 45p = £2,700 business expense claim
This is the most straightforward method and often preferred for sole traders with low to moderate mileage.
2. Actual Costs Method
Instead of mileage, you claim a proportion of the actual running costs of your vehicle. This includes:
- Fuel
- Servicing
- Repairs
- Insurance
- Depreciation
You must keep full receipts and evidence, and accurately calculate the business-use percentage.
Important: Once you start using the simplified mileage method for a specific vehicle, you must continue to use it for that vehicle while you own it.
Limited Company Directors: How to Reclaim Mileage
If you’re a director using your own personal vehicle for business trips made on behalf of your limited company, you cannot claim mileage on your personal tax return. Instead, you can reimburse yourself from the company using the HMRC mileage rates.
This payment is:
- Tax-free for you
- Tax-deductible for the company
- Not subject to National Insurance
You must keep a detailed mileage log showing:
- Date of each trip
- Start and end locations
- Purpose of the trip
- Number of miles
Mileage claims can be submitted monthly or quarterly, and you can pay yourself from the company’s business account.
Employees: Mileage Reimbursement from Employer
If you’re an employee and use your own car for work travel (e.g. sales visits, site meetings), your employer may reimburse you using the HMRC rates. If they:
- Reimburse at 45p/25p per mile: no tax is due
- Reimburse at a lower rate: you can claim Mileage Allowance Relief from HMRC
- Reimburse more than HMRC rates: the excess is taxable and must be reported
To claim tax relief if underpaid, you can:
- Use a P87 form (for claims under £2,500)
- Include it on your Self Assessment tax return
How to Keep Proper Records
Accurate mileage records are essential. HMRC may request to see documentation if they audit your accounts or self-assessment return.
Your mileage log should include:
- Date of each trip
- Where you travelled from and to
- Purpose of the journey
- Total miles driven
You can use a spreadsheet, mileage logbook, or dedicated apps like:
- MileIQ
- Tripcatcher
- Driversnote
Keeping receipts for fuel isn’t required when using mileage rates — but it helps demonstrate the context if needed.
Pitfalls to Avoid
-
Commuting confusion
Many mistakenly claim mileage from home to work — but this is not allowed unless the workplace is temporary. -
Double claiming
You can’t claim both mileage and actual car costs (e.g., fuel or repairs) — it’s one or the other. -
Poor record keeping
Failing to keep detailed mileage logs could mean the entire claim is disallowed during an HMRC enquiry. -
Claiming for non-business journeys
Be careful not to claim for trips that are partly personal — HMRC expects all mileage to be wholly for business.
What About Electric Vehicles?
You can still use the standard 45p/25p per mile rates for electric vehicles (EVs) used personally for business. HMRC has not yet introduced separate rates for EV mileage claims when using the simplified method.
If your company owns the EV and provides it to you, then Benefit-in-Kind (BiK) rules apply instead.
Is Mileage Allowance Worth Claiming?
Absolutely — whether you’re self-employed or running a limited company, claiming business mileage helps reduce your taxable profit and saves you money.
Even small weekly business trips can add up to hundreds or thousands of pounds of deductible expenses per year.
Need Help with Mileage Claims?
At Merranti Accounting, we help clients set up compliant and efficient systems for claiming mileage and vehicle expenses. Whether you’re a sole trader, company director, or growing business with employees on the road, we’ll help you:
- Set up mileage logs
- Reimburse directors correctly
- Choose between simplified or actual cost methods
- Prepare for VAT inspections and HMRC audits
Get in touch today to make sure you’re claiming the full allowance — and doing it the right way.
