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Business Mileage Expenses Calculator

Mileage calculator for UK business expenses

If you use your personal vehicle for business purposes, you can claim an expense based on the number of business miles travelled, rather than the actual running costs of the vehicle.

This is done by multiplying your business mileage by HMRC’s approved mileage rates and recording the total as a business expense in your accounts. Claiming mileage reduces your taxable profit and, in turn, the amount of tax your business pays.

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Mileage Calculator

Mileage Expenses Calculator
Remember to only include the miles you travelled for business purposes.

Sole Trader

As a sole trader, mileage claimed at HMRC approved rates counts as a business expense. This reduces your taxable profit and is included as part of your self-employed expenses when completing your Self Assessment tax return. You can choose to claim mileage rather than individual vehicle costs, but once you use mileage for a vehicle, you must continue using this method for that vehicle.

Limited Company

If you run a limited company, business mileage is usually claimed as a reimbursement from the company to you as a director or employee. When paid at HMRC approved mileage rates, this reimbursement is tax-free and does not need to be reported as a benefit in kind. The company can claim the payment as a business expense for Corporation Tax purposes.

Partnership / LLP

For partnerships and LLPs, business mileage is normally claimed by individual partners rather than the partnership itself. Each partner can claim mileage at HMRC approved rates for business journeys made using their own vehicle. These claims are then treated as allowable business expenses when calculating each partner’s share of taxable profit.

Disclaimer

This content is provided for general information only and reflects our understanding of UK tax legislation at the time of writing. Mileage rules and tax rates may change, and individual circumstances can vary. For personalised advice, you should consult a qualified accountant or HMRC directly.

HMRC Approved Mileage Rates

HMRC sets standard mileage rates for UK businesses:

  • Car or van:
    • 45p per mile for the first 10,000 business miles in the tax year
    • 25p per mile for any business miles over 10,000
  • Motorbike: 24p per mile
  • Bicycle: 20p per mile

These rates are intended to cover all vehicle-related costs, including fuel, insurance, servicing, repairs, and depreciation. If you claim mileage using HMRC’s approved rates, you cannot also claim separate vehicle expenses or capital allowances for that vehicle.

Example of a Mileage Claim

John is the director of a limited company and uses his own car for business travel.

  • Business journey: 30 miles
  • Business mileage already claimed this tax year: 9,980 miles

This means that 10 miles of the journey fall over the 10,000-mile threshold:

9,980 + 30 = 10,010 miles

John can claim:

  • 20 miles × £0.45 = £9.00
  • 10 miles × £0.25 = £2.50

Total mileage claim: £11.50

This amount can be recorded as a business expense and reimbursed to John by the company.

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What Is Mileage Allowance?

Mileage allowance is a UK tax relief that lets business owners and workers claim tax-free expenses for using their own vehicle for business journeys. Instead of claiming actual fuel and running costs, HMRC allows you to use approved mileage rates to calculate your claim based on the number of business miles travelled.

The mileage rates are set by HMRC and vary depending on the type of vehicle you use. For cars and vans, the standard rate is 45p per mile for the first 10,000 business miles in a tax year, and 25p per mile thereafter. Different rates apply for motorcycles and bicycles.

Mileage allowance is available to sole traders, limited company directors, employees, and partners – as long as the journey is wholly and exclusively for business purposes.

What Is Mileage Allowance - Accounting Wise
Why Is Claiming Mileage Expenses Important - Accounting Wise

Why Is Claiming Mileage Expenses Important?

Claiming mileage expenses is important because it allows business owners and workers to recover the true cost of using their own vehicle for work-related journeys. Without claiming mileage, you may end up paying tax on income that has effectively already been spent on fuel, maintenance, insurance, and vehicle wear and tear.

For sole traders and partners, mileage claims reduce taxable profit and can lower the amount of Income Tax and National Insurance due. For limited company directors and employees, mileage claims can be reimbursed tax-free by the company when claimed within HMRC approved rates.

Understanding how mileage expenses work helps you stay compliant, avoid underclaiming legitimate costs, and manage cash flow more effectively — all while ensuring your records meet HMRC requirements.

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Content is for general information only. Always take advice.