Understanding HMRC Mileage Allowance: How to Claim for Business Driving

The HMRC mileage allowance rates for 2025/26 are 45p per mile for the first 10,000 business miles in a tax year, and 25p per mile beyond that. If you drive for work — whether you're self-employed, run a limited company, or use your own car as an employee — you can claim this allowance to reduce your taxable income and cut your tax bill. This guide explains which miles count, how to keep records HMRC will accept, and exactly how to calculate what you owe.

What Is the HMRC Mileage Allowance?

The mileage allowance is a way HMRC lets you claim a deduction for using your own vehicle for business purposes. You don't claim the actual costs of running the car (fuel, maintenance, insurance) — instead, you get a flat rate per mile, set by HMRC.

The rates are:

45p per mile for the first 10,000 miles in the tax year
25p per mile for miles beyond 10,000

This two-tier system exists because your first 10,000 business miles absorb more of the fixed costs of owning a car (insurance, tax, depreciation), so HMRC allows a higher rate. Once you've hit 10,000, the extra miles are mostly just fuel and wear and tear, which is cheaper per mile.

Here's a real example: if you drive 12,000 business miles in a tax year, you'd claim:

10,000 miles × 45p = £4,500
2,000 miles × 25p = £500
Total claim: £5,000

This £5,000 comes off your taxable income. If you're a basic rate taxpayer (paying 20% income tax), that saves you £1,000 in tax. If you're a higher rate taxpayer (40%), it saves you £2,000.

You don't need fuel receipts or invoices. You just need to record the miles and prove you did the driving. HMRC publishes the official rates and updates them annually, usually in April.

What Counts as Business Driving?

Business mileage is any driving you do wholly and exclusively for work purposes. It's tighter than you might think.

Miles that count:

Driving to a client meeting or site visit
Going to a supplier or a job site
Attending a conference, training course, or networking event for work
Using your car on behalf of your business between two different work locations

Miles that don't count:

Your regular commute from home to your main place of work (even if your home is your office, driving to a client site from home usually counts, but your home-to-office routine doesn't)
Personal errands, family trips, shopping
Holiday or leisure driving, even if the vehicle is a work car

The rule is "wholly and exclusively" — meaning the entire journey must be for business. If you drive to a client meeting and stop for personal shopping on the way, only the business portion counts.

For employees, this matters less because you're limited to what your employer reimburses. For self-employed people, it matters a lot — HMRC can disallow claims if the records are vague or if you're claiming personal miles as business miles.

How to Keep a Mileage Log HMRC Will Accept

HMRC doesn't require you to submit your mileage log with your tax return, but you must keep one in case they ask. They can enquire up to 4 years back (6 years if they suspect carelessness). A vague log like "drove around for work" won't hold up.

Here's what you should record for each business journey:

Date (day and month)
Starting odometer reading (or starting location if you don't have the odometer)
Ending odometer reading (or ending location)
Total miles (calculated from odometer or estimated from the route)
Purpose of the journey (e.g., "Client meeting with John Smith at Manchester office" or "Visit to supplier in Liverpool")
Business destination (the place you drove to for work)

You can keep this as a:

Digital spreadsheet (Google Sheets, Excel) — easiest to total up and update
Mileage app (many smartphone apps track your route and log miles automatically)
Paper logbook (a physical record is fine if your handwriting is legible)
Car odometer records (if you keep a photo or screenshot of your odometer at the start and end of each week, that works too)

The key is that the records must be contemporaneous — kept at the time you're doing the driving, not reconstructed months later from memory. HMRC scrutinises claims that rely on "approximate" mileage because people overestimate.

One practical tip: if you do regular journeys (e.g., same client visit every Tuesday), you can log it once with the mileage, then mark subsequent visits as "same route as [date]." That saves time and makes it clearer to anyone reviewing your records.

Calculating Your Claim

The maths is simple, but it's easy to make an error, so let's walk through it step by step.

Step 1: Add up your business miles Go through your mileage log and total the miles you've recorded for business driving in the tax year (6 April to 5 April). Keep the count to two decimal places if you're using a digital log — it matters for big claims.

Step 2: Separate into two bands

Take the first 10,000 miles and multiply by 0.45
Take any miles above 10,000 and multiply by 0.25

Step 3: Add the two amounts That's your total mileage allowance deduction.

Step 4: Work out your tax saving Multiply your allowance by your marginal tax rate. If you're a basic rate taxpayer, use 20%. If you're a higher rate taxpayer, use 40%. (If you're additional rate at 45%, use 45%.)

Worked example: Imagine you're a self-employed consultant who drove 15,000 business miles last year. You're a basic rate taxpayer earning £45,000.

10,000 miles × £0.45 = £4,500
5,000 miles × £0.25 = £1,250
Total claim: £5,750
Tax saving: £5,750 × 20% = £1,150

So instead of paying tax on £45,000, you pay tax on £39,250. That's a real saving, and it's why keeping good records is worth the effort.

Mileage vs. Actual Expenses: Which Should You Use?

You can't claim both the mileage allowance and your actual motoring expenses (fuel, insurance, maintenance, depreciation, breakdown cover). You must choose one or the other.

Use the mileage allowance if:

You drive under 15,000 miles a year for business (the allowance usually works out better)
Your car has high fuel efficiency or you own it outright (low actual costs)
You want simplicity — no need for fuel receipts or maintenance invoices

Use actual expenses if:

You drive 20,000+ business miles a year in an older or less fuel-efficient car (actual costs are higher)
Your car is part of a business fleet and you have detailed running cost records

For most employee and sole trader drivers, the mileage allowance is simpler and more generous. You're also better protected if HMRC ever questions your claim — the rates are published and transparent, whereas actual expenses require detailed proof.

Note: if you're claiming working from home tax relief, that's a separate allowance and doesn't affect your mileage claim.

Common Mistakes to Avoid

1. Forgetting to keep records. HMRC won't accept "about 8,000 miles" as a claim. You need a contemporaneous record with specific dates and destinations. If you lose your log halfway through the year, you can only claim the miles you've recorded.

2. Claiming personal miles. The biggest red flag is rounding up or claiming journeys that were partly personal. If you drove to a client meeting and stopped at the shops on the way, only claim the miles to the client, not the whole trip.

3. Claiming from home to your regular workplace. If you're employed and work at the same office every day, that commute doesn't count. If you're self-employed and work from home, driving from home to a client site does count — but only the journey to the client, not the journey to your home office.

4. Not updating your records. Trying to reconstruct a year's worth of mileage in January is asking for trouble. Log as you go, or use an app that does it automatically.

5. Mixing personal and business use on one car. If you use your car for both personal and business driving, you can only claim the business miles. Some drivers keep two vehicles separate to avoid confusion — a business car and a personal car. If you have only one car, be careful to log only the business journeys.

6. Claiming with no way to prove it. If HMRC asks for supporting evidence and you can't show it, they'll disallow the claim. Keep your log, keep receipts for related business expenses (fuel if you have receipts, parking, tolls), and be ready to explain the journeys.

Frequently Asked Questions

Can I claim mileage allowance if I'm an employee? Yes, but only if your employer requires you to use your own car and doesn't reimburse you for all the mileage. If your employer gives you a mileage allowance that covers the HMRC rate, you can't claim extra. If they pay less, you can claim the difference. Check your employment contract and payslips.

What if I use a motorbike or van? HMRC mileage rates also apply to motorbikes (at the same rate: 45p for the first 10,000 miles). For vans, the rate is the same. For electric vehicles, the rate is also the same — the vehicle type doesn't change the allowance. The allowance is about business miles, not the vehicle.

Can I claim the same journey twice? No. You can claim the mileage once. If you drove to a client and back the same day, you claim both legs (outbound + return), but you don't claim it again on another form or to another body.

How do I claim on my tax return?

If you're self-employed: fill in your Self-Assessment tax return under "Business expenses" or "Motor expenses". You'll enter the total allowance you're claiming (e.g., £5,000). HMRC will ask for supporting evidence if they query it, so keep your logbook.
If you're an employee: claim on your tax return under "Employment expenses" or ask your employer if they'll reimburse you through payroll. You'll need to provide evidence (your mileage log).
If you're a limited company director: your company claims the mileage as an expense on the company tax return, and you keep the logbook as supporting evidence.

What if I don't keep detailed records? HMRC can estimate your mileage if you have some supporting evidence — fuel receipts, parking tickets, calendar entries for meetings — but if you have no records at all, they can disallow the claim. Even a simple spreadsheet with dates and rough destinations is better than nothing. It's much easier to keep a log than to argue with HMRC afterward.

Do I need receipts for mileage claims? No. Mileage allowance doesn't require fuel receipts or invoices. The odometer reading (or your recorded distance) is your evidence. If you're also claiming actual expenses like parking, tolls, or business fuel, those would need receipts, but the mileage allowance itself doesn't.

How far back can I claim? You can only claim mileage for the tax year you're reporting (6 April to 5 April in the UK). If you missed a claim in a previous year, you can amend your tax return going back 4 years from the filing deadline. Beyond that, it's too late. It's worth checking your last few years of returns if you think you missed a claim.

What about fuel costs — can I claim those too? If you use the mileage allowance, fuel is already factored into the rate, so you can't claim fuel separately. The 45p and 25p per mile already account for fuel, maintenance, and depreciation. If you used actual expenses instead, you could claim fuel separately, but then you'd lose the mileage allowance.

Keep it simple. The mileage allowance is one of the easiest tax reliefs to claim — you just need a record of the miles and a clear business purpose. A spreadsheet or a mileage app takes minutes to maintain, and it could save you hundreds in tax. If you're self-employed or drive regularly for work, it's worth doing properly.

For other business expenses like equipment purchases or tax-deductible working-from-home costs, the same principle applies: keep records, be clear about the business purpose, and claim what you're entitled to.