Business Mileage Tax Calculator UK 2026
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What is Business Mileage Tax?
If you use your own vehicle for work, you could be entitled to claim money back through HMRC’s approved mileage allowance. Use our free business mileage tax calculator UK to find out exactly how much you can claim for cars, vans, motorcycles and bicycles, based on the current 2026 HMRC rates. It takes less than a minute.
When you drive your own vehicle for work purposes, HMRC allows you to claim a tax-free allowance for every business mile you cover. This is known as the Mileage Allowance Payment (MAP), and it is designed to cover the real costs of using your personal vehicle for work, including fuel, wear and tear, insurance, and general maintenance.
Business mileage tax is not a separate tax in its own right. Rather, it refers to the way HMRC accounts for the miles you drive on business, either as a tax relief you can claim back, or as a tax-free reimbursement your employer can pay you without it counting as taxable income.
For self-employed individuals and sole traders, business mileage is recorded as a business expense on your Self Assessment tax return. This reduces your taxable profit, which in turn lowers your overall tax bill. The more business miles you drive, the more you can potentially deduct.
It is worth being clear on one important point: your regular commute from home to a fixed workplace does not count as business mileage. HMRC only recognises travel that is genuinely for business purposes, for example, visiting a client, travelling between different work sites, or attending a business meeting away from your usual place of work.
The rates used to calculate your mileage claim are set by HMRC and are known as the Approved Mileage Allowance Payments (AMAPs). For the 2026 tax year, these rates remain unchanged from the previous year, as shown in the table below.
Vehicle Type | First 10,000 Miles | Above 10,000 Miles |
Car or van | 45p per mile | 25p per mile |
Motorcycle | 24p per mile | 24p per mile |
Bicycle | 20p per mile | 20p per mile |
Note that if you carry a fellow employee as a passenger on a business journey, you can claim an additional 5p per mile per passenger, on top of your standard mileage rate.
How to Use the Mileage Tax Calculator
Our mileage claim calculator is straightforward to use. Follow these three steps:
Step 1: Choose your vehicle type. Select whether you are using a car, van, motorcycle, or bicycle for your business travel. Each vehicle type has a different HMRC approved rate.
Step 2: Enter your business miles. Input the total number of business miles you have driven in this tax year. If you use more than one vehicle for work, calculate each one separately and then add the results together.
Step 3: Get your mileage claim figure. The mileage expense calculator will instantly show you the total amount you can claim. This is the figure you will use as a deductible expense on your Self Assessment tax return.
A quick worked example:
Say you drive a car and you have covered 12,000 business miles this tax year. Your mileage allowance would be calculated like this:
- First 10,000 miles: 10,000 × 45p = £4,500
- Remaining 2,000 miles: 2,000 × 25p = £500
- Total claim: £5,000
That £5,000 is deducted from your taxable profit. If you pay tax at 20%, this would save you £1,000 in Income Tax. If you are a higher rate taxpayer at 40%, the saving would be £2,000.
One thing to keep in mind, this method is called Simplified Expenses, and it is one of two approaches you can take. The other is to work out your actual running costs and claim a proportion based on business use. You cannot use both methods at the same time, so it is worth thinking about which approach gives you the better result before you commit.
What is the Mileage Allowance?
The Mileage Allowance, formally known as the Approved Mileage Allowance Payment (AMAP), is the HMRC-approved rate at which you can be reimbursed, or at which you can claim tax relief, for using your personal vehicle for business travel.
These rates are tax-free up to the approved limits. That means:
- If you are employed and your employer pays you at or below the HMRC approved rate, neither you nor your employer owes any tax or National Insurance on that payment.
- If your employer pays you less than the approved rate (or nothing at all), you can claim Mileage Allowance Relief (MAR) directly from HMRC for the shortfall. You do this via your Self Assessment tax return or by completing a P87 form.
- If your employer pays you more than the approved rate, the excess is taxable and must be reported.
- If you are self-employed, you simply deduct the calculated mileage allowance as a business expense on your tax return to reduce your taxable profit.
The HMRC mileage allowance rates have not changed since 2011. At 45p per mile for the first 10,000 miles and 25p per mile thereafter for cars and vans, many business owners feel the rates have not kept pace with the real cost of running a vehicle, but these remain the current official figures for the 2025/26 tax year.
It is also worth knowing that the mileage allowance is designed to cover all motoring costs in one flat rate, fuel, insurance, servicing, tyres, depreciation, and anything else connected with running your vehicle. You cannot claim the mileage rate and then also claim separate deductions for fuel receipts or insurance — it is an either/or approach.
Am I Eligible for Business Mileage Tax?
Most people who use their own vehicle for work are eligible to claim the HMRC mileage allowance. However, there are a few straightforward rules to check before you use this mileage rates calculator.
You are likely eligible if:
- You are self-employed or a sole trader and you drive your own vehicle for business purposes.
- You are an employee and your employer does not fully reimburse you at the HMRC approved rate for your business miles.
- You use a car, van, motorcycle, or bicycle that is registered in your name (or that you personally lease) for work travel.
- The journeys you are claiming for are genuinely for business — visiting clients, travelling to a temporary workplace, attending business meetings, and so on.
You are not eligible to use the simplified mileage method if:
- You have already claimed Capital Allowances on the same vehicle in a previous tax year. Once you have claimed Capital Allowances on a vehicle, you must continue to use the actual cost method, you cannot switch to the flat mileage rate.
- You are claiming for commuting. Travelling between your home and a permanent workplace does not count as business mileage under HMRC rules.
- The vehicle belongs to your employer or your limited company. Company-owned vehicles are subject to different rules entirely.
A note for limited company directors: If you are the director of a limited company and you use your personal vehicle for company business, you can claim the HMRC mileage rate as a reimbursable expense from your company. The company then deducts this as a business cost, which reduces its Corporation Tax bill. This is a commonly overlooked saving for micro entity directors.
What are Capital Allowances?
Capital Allowances are a form of tax relief that lets you deduct the cost of certain assets, including vehicles from your taxable profit. They are an alternative to the flat-rate mileage method and are worth considering if you purchased your vehicle specifically for business use or if your actual running costs are high.
For most small business owners and sole traders, there are two main types of Capital Allowance that apply to vehicles:
Annual Investment Allowance (AIA): This allows you to deduct the full cost of qualifying plant and machinery, including some vehicles in the year you buy it, up to the current AIA limit. However, cars are excluded from the AIA, so this route is more relevant for vans, tools, and equipment.
Writing Down Allowance (WDA): This is the most common way to claim Capital Allowances on a car. The rate depends on the vehicle’s CO₂ emissions:
CO₂ Emissions | Writing Down Allowance |
0g/km (fully electric) | 100% First Year Allowance |
Up to 50g/km | 18% per year (main rate pool) |
Over 50g/km | 6% per year (special rate pool) |
If your car is used partly for business and partly for personal journeys, you can only claim Capital Allowances on the business-use proportion.
Which is better? Capital Allowances or mileage rates?
There is no single answer. For someone driving a low-emission car with high business mileage, the flat mileage rate often works out better because it is simpler and the per-mile value adds up quickly. For someone who bought an expensive vehicle specifically for business use, Capital Allowances may give a larger deduction, particularly in the first year.
The key rule to remember is this: once you claim Capital Allowances on a vehicle, you must stick with the actual cost method for that vehicle. You cannot then switch to the mileage rate later. So it is worth making the right choice from the outset. If you are not sure which approach suits your situation, speaking to an accountant before filing is a sensible step.
FAQs: Business Mileage Tax Calculator
How do I calculate business mileage for tax purposes in the UK?
To calculate your business mileage claim, you multiply the number of business miles driven by the HMRC approved rate for your vehicle type. For a car or van, the rate is 45p per mile for the first 10,000 miles and 25p per mile for every mile above that. Motorcycles are 24p per mile and bicycles are 20p per mile. These flat rates cover all vehicle running costs, so there is no need to keep receipts for fuel or maintenance separately. Use our mileage claim calculator above to get your figure quickly.
What is the HMRC mileage rate for 2026?
The HMRC approved mileage rates for the 2026 tax year are: 45p per mile for the first 10,000 miles in a car or van, and 25p per mile for every mile after that. For motorcycles, the rate is 24p per mile with no upper limit. For bicycles, the rate is 20p per mile. These rates have not changed since 2011. Electric cars owned personally follow the same 45p/25p structure as petrol and diesel cars.
Can I claim business mileage if I am self-employed?
Yes. If you are self-employed or a sole trader, you can claim your business mileage as an expense on your Self Assessment tax return. Using HMRC’s simplified expenses method, you multiply your total business miles by the approved rate for your vehicle type. The resulting figure is recorded as a deductible expense, which reduces your taxable profit and therefore the amount of Income Tax you owe.
What counts as business mileage?
Business mileage covers any journey you make that is genuinely for work purposes. This includes travelling to visit clients or customers, driving to a temporary workplace, going between different business locations, and attending work-related meetings or events away from your usual base. It does not include your regular commute between your home and a permanent fixed workplace, that is considered personal travel by HMRC and cannot be claimed.
Can I claim mileage if my employer does not pay me for business travel?
Yes. If your employer does not reimburse you for business miles, or pays you less than the HMRC approved rate, you can claim Mileage Allowance Relief (MAR) for the shortfall. This is done through Self Assessment or by submitting a P87 form to HMRC. The relief reduces the amount of tax you pay by the amount of the shortfall, so you are not out of pocket for using your personal vehicle on behalf of your employer.
Can limited company directors claim mileage?
Yes. As a limited company director using your own personal vehicle for company business, you can claim the HMRC approved mileage rate back from your company as a reimbursable expense. The company records this as a business cost, reducing the Corporation Tax it pays. This is one of the more tax-efficient ways for a director to manage business travel costs, and it is fully HMRC-compliant provided the journeys are genuinely for business purposes.
Does the mileage rate cover fuel costs as well?
Yes. The HMRC flat mileage rate is designed to cover all costs associated with running your vehicle, including fuel, oil, servicing, insurance, tyres, MOT, and depreciation. Because all of these costs are bundled into the single per-mile rate, you cannot claim them separately in addition to the mileage allowance. If you prefer to track and claim each individual cost, you would need to use the actual cost method instead, and the two methods cannot be combined for the same vehicle.
Can I claim mileage for an electric car?
Yes. If you own an electric car and use it for business travel, you can claim the same HMRC mileage rate as for a petrol or diesel car, 45p per mile for the first 10,000 business miles and 25p per mile after that. This applies to personally owned electric vehicles. Note that for company-owned electric cars, HMRC sets separate advisory electricity rates, which are lower. The standard mileage allowance for personal electric vehicles is the same as for any other privately owned car.
How do I keep records of my business mileage?
HMRC requires you to keep accurate records to support any mileage claim. Your mileage log should include the date of each journey, the start and end locations, the purpose of the trip, and the total miles covered. You can keep records in a paper logbook or use a mileage tracking app. Without proper records, HMRC can disallow your claim or treat the payment as taxable income, so it is worth keeping your log up to date throughout the year rather than trying to reconstruct it at tax return time.
What is the difference between mileage allowance and fuel reimbursement?
Mileage allowance is a flat-rate payment per business mile that covers all vehicle costs, fuel, wear and tear, insurance, and depreciation. Fuel reimbursement, on the other hand, covers only the cost of fuel used on a journey, typically based on actual receipts or HMRC’s advisory fuel rates for company cars. If you use your personal vehicle for work and claim the mileage allowance, you cannot also claim fuel costs on top, the allowance already includes them. Fuel reimbursement as a separate item is generally used for company-owned vehicles.
Can I claim mileage for the same car I have claimed Capital Allowances on?
No. Once you have claimed Capital Allowances on a vehicle, you cannot switch to using the flat mileage rate for that same vehicle. The two methods are mutually exclusive. If you have claimed Capital Allowances on your car in any previous tax year, you must continue to use the actual cost basis for your vehicle expenses. This is why it is important to think carefully about which method you choose when you first start using a vehicle for business purposes.
Can I claim for more than one vehicle?
Yes. If you use more than one vehicle for business travel, for example, a car and a motorcycle, you can claim the appropriate mileage rate for each vehicle separately. However, the 10,000-mile threshold for cars and vans applies across all cars and vans combined in a tax year, not per vehicle. So if you use two cars for business, the first 10,000 miles in total across both vehicles is at 45p per mile, not the first 10,000 in each car.
When should I claim mileage instead of Capital Allowances?
The flat mileage rate tends to work better if your vehicle is older, has lower running costs, or if your business mileage is relatively high. Capital Allowances tend to give a larger deduction in the early years for a recently purchased, higher-value vehicle, particularly a low-emission or electric car that qualifies for enhanced allowances. If you are a sole trader just starting out and you have not previously claimed Capital Allowances on your vehicle, the mileage rate is generally the simpler and more popular choice.
How do I claim business mileage on my Self Assessment tax return?
If you are self-employed, you claim your mileage allowance in the ‘Self-employment’ section of your Self Assessment tax return, under business expenses. You enter the total mileage claim figure as calculated using the HMRC approved rates. You do not enter each journey individually, just the total amount. Make sure your mileage log is ready to back up the figure in case HMRC ever asks for evidence. If you are an employee, you use form P87 (or your Self Assessment return if you already file one) to claim Mileage Allowance Relief.
Is the 45p mileage rate changing in 2026?
No. The HMRC approved mileage rate for cars and vans has remained at 45p per mile for the first 10,000 miles since 2011 and has not changed for the 2026 tax year. There has been ongoing industry pressure to increase the rate to better reflect current fuel and running costs, but as of now the rate stands at 45p per mile (first 10,000 miles) and 25p per mile thereafter for cars and vans. If HMRC announces any changes, we will update this page accordingly.