A Guide to HMRC Mileage Claims

You finish a job, jump back in the van, stop at the merchant, then head across town for the next call-out. That back-and-forth costs money every day, and this guide to HMRC mileage claims is about making sure those business miles do not get forgotten when tax time rolls round.

For sole trader tradespeople, mileage is one of those expenses that is easy to miss because it happens in bits. A run to a customer in the morning, a supplier trip at lunch, an emergency repair in the evening. None of it feels like bookkeeping while you are doing it. But if you use your own vehicle for work, those miles can reduce your tax bill - if you claim them properly.

What HMRC mileage claims actually mean

An HMRC mileage claim is a way of claiming tax relief for business journeys made in your own vehicle. Instead of totalling up fuel, servicing, repairs, insurance and all the other running costs for each business trip, you use HMRC's approved mileage rates.

That is why plenty of sole traders prefer it. It is simpler, quicker and far easier to keep straight when you are mostly working from your mobile phone or van cab rather than sitting in front of a spreadsheet at 9pm.

The main point is this: you are not claiming the full cost of owning the vehicle. You are claiming a set amount per business mile, based on HMRC's allowance rates.

HMRC mileage rates for sole traders

If you are using the simplified expenses method, the current approved rates for cars and vans are:

• 45p per mile for the first 10,000 business miles in the tax year
• 25p per mile after that

For motorcycles, it is 24p per mile. For bicycles, it is 20p per mile.

Most tradespeople reading this will care about cars and vans. If you drive 8,000 business miles in a tax year, you could claim 8,000 x 45p, which is £3,600 as an allowable expense. If you drive 12,000 business miles, you would claim 10,000 at 45p and 2,000 at 25p, giving you £5,000.

That does not mean HMRC hands you £5,000 in cash. It means your taxable profit is reduced by £5,000. The actual tax saving depends on your profit and tax position.

Which journeys count as business mileage

This is where people get caught out. Not every trip in a work van counts.

Business mileage usually includes travel to jobs, travel between sites, trips to pick up materials, visits to suppliers, bank runs for the business, and journeys made for other business admin. If you are a plumber driving from one customer to another, or a builder going from site to the merchant and back to site, that is normally business mileage.

What does not usually count is ordinary commuting. If you travel from home to your regular base of work, HMRC generally sees that as personal travel, not business mileage.

For sole traders in the trades, this can get a bit grey because your working pattern may not look like a normal office job. If you work at different customer addresses most days, many of those trips may qualify. If you always go to the same workshop, yard or unit first and that is effectively your regular base, the journey from home to there may not.

It depends on how your business actually operates. That is why accurate records matter. They help show the difference between genuine business travel and private use.

Can you claim mileage if the van is also used personally?

Yes, but only for the business miles.

A lot of sole traders use one vehicle for everything. Site visits in the week, tip run on Saturday, family errands on Sunday. That is common, and HMRC allows for it. You just need to separate business mileage from personal mileage.

This is another reason the mileage method suits many tradespeople. You are not trying to split every fuel receipt line by line. You are simply recording how many miles were for work.

Still, you need to be honest about it. If your log says every mile you drove all year was business-related, expect questions.

What records you need for HMRC mileage claims

You do not need anything fancy, but you do need records that make sense.

For each business journey, record the date, where you travelled from and to, why the trip was for business, and how many miles you drove. You should also keep enough background evidence to support that log, such as diary entries, job sheets, invoices or appointment details.

A notebook in the glove box is better than nothing, but it often turns into guesswork. A mobile phone-based system is usually more realistic because the journey can be logged there and then, while it is still fresh.

If you are ever asked to back up a claim, HMRC will want to see that your numbers were recorded properly, not worked out from memory months later.

Mileage claims or actual vehicle costs?

This is the part worth getting right early. For sole traders, HMRC generally lets you use simplified expenses for vehicles or claim the actual business proportion of running costs. In most cases, you do one or the other for that vehicle, not both.

The mileage method is simpler. It rolls vehicle running costs into one flat rate. That means you cannot usually claim fuel, repairs, servicing, insurance and similar costs separately on top for the same vehicle.

The actual cost method can sometimes produce a bigger claim, especially if the vehicle is expensive to run and heavily used for business. But it also means more admin, more receipts, and more effort splitting business and personal use.

For tradespeople who want the job done fast and records kept clean, mileage is often the easier route. Not always the biggest claim, but often the most manageable one.

A simple example

Say you are an electrician using your own van. Over the tax year, you drive 14,000 miles in total. Of those, 9,500 are for customer jobs, merchant visits and trips between sites. The rest are personal.

Under HMRC mileage rates, you could claim 9,500 miles at 45p, which gives an allowable expense of £4,275.

If instead you used actual costs, you would need to total the van's running costs and then work out the business-use percentage. That can be worth doing if your costs are high, but it is more admin and easier to get wrong.

Common mistakes that cause problems

The biggest mistake is backfilling mileage at year end. By then, jobs blur together and numbers start looking suspiciously round. HMRC prefers records made at the time.

Another common problem is claiming home-to-work travel that does not qualify. If you always start from the same unit or workshop, that regular journey may not count just because you are self-employed.

People also mix methods. If you are using the mileage basis for a vehicle, you cannot usually pile on separate fuel and repair claims for that same vehicle as well.

Then there is the habit of keeping fuel receipts but no mileage log. Fuel receipts on their own do not prove business mileage. They prove you bought fuel.

How to make mileage claims easier through the year

The easiest system is the one you will actually keep using.

Log trips as you go. Keep job details tidy. Make sure invoices, appointments and expense records line up with where you were working. If your records live in three different places, tax time becomes a scavenger hunt.

This is where mobile-first admin helps. If you already run quotes, invoices and expenses from your mobile phone, adding mileage records to the same routine makes life easier. TradeTally is built for that kind of work pattern - vans, sites and short evenings - so your records are not spread across scraps of paper, old texts and half-finished notes.

When it is worth double-checking your approach

If you have changed vehicles, started using a van more heavily for work, or are not sure whether a journey counts as business or commuting, it is worth reviewing your method before you file your return.

The best option is not always the one with the biggest headline number. Sometimes the right call is the one you can evidence properly and keep consistent. A slightly smaller claim that is clean and defensible is better than an aggressive one you cannot back up.

Mileage claims are not complicated once you strip away the jargon. If you drive for work, keep a proper log, know which journeys count, and choose one method that fits how you actually run the vehicle. That bit of discipline during the year can save a lot of hassle when the tax return is staring back at you.