HMRC mileage and expenses basics: what to record, what to claim

If you drive for work — as a self-employed tradesperson, a contractor between sites, or an employee using your own car — mileage is one of the most under-claimed expenses in the UK. Here's how the system works and what records you actually need to keep.

The Approved Mileage Allowance Payment (AMAP) rates

HMRC's approved rates are:

• 45p per mile for the first 10,000 business miles per year (cars and vans)
• 25p per mile for every business mile beyond 10,000
• +5p per mile per passenger you carry on the same business trip (passenger payments, if you're an employee, must be part of a scheme your employer operates)

If your employer reimburses less than the approved amount, you can claim Mileage Allowance Relief on the difference through Self Assessment. If they reimburse more, the excess is taxable.

Commuting doesn't count

Ordinary commuting between home and your normal workplace is not a business mile — for anyone. What counts is travel on the job: between clients, sites, suppliers, or from your normal workplace to a temporary one. If you're self-employed and work from home, journeys from home to a client can count in full. Borderline cases are worth an hour with an accountant, because getting them systematically wrong cuts both ways.

What records HMRC expects

For every business trip, keep:

1. Date
2. Destination
3. Purpose (a phrase is enough — "site visit, Leeds")
4. Miles travelled

That's it — but it must exist. A reconstructed diary months later is exactly the kind of thing that falls apart in an inquiry. Record trips as you do them, either on paper or in an app that captures GPS and lets you mark business/private.

Simplified expenses vs actual costs

For the self-employed, flat-rate vehicle expenses (the AMAP-style route through "simplified expenses") are usually the low-effort choice: no receipts for fuel, servicing or insurance needed — the per-mile rate covers them. The alternative is claiming the actual running costs plus capital allowances, proportionate to business use. High-mileage drivers with an efficient older car sometimes do better on actual costs; the flat rate wins on simplicity almost every time. Employees can only use the AMAP route (or their employer's own scheme) — not actual costs.

The four-year window and the 10,000-mile cap

You can amend a Self Assessment return for up to four years after the 31 January deadline — forgotten mileage from previous tax years can still be claimed. Note the 10,000-mile threshold applies across all vehicles to the individual, not per car, so if you use two vehicles for work the bands are shared between them.

Make the record-keeping painless

The hard part isn't the rules — it's having a clean log at year end. VehicleHub records GPS trips with a one tap, lets you split business and private miles, and generates a monthly mileage report you can email yourself or your accountant as a PDF or CSV. Set your rate once (45p or 25p depending on your band) and the numbers are just there when you need them.