The Complete Guide to Business & Self-Employed Driving in the UK (2026)
Key takeaways
- For 2026/27 the HMRC mileage rate for cars and vans is 55p per mile for the first 10,000 business miles and 25p after that. The first 10,000-mile rate was 45p until 5 April 2026
- The rate covers your running costs, so you can't also claim fuel, vehicle tax, MOT or repairs separately for the same business miles
- A standard van pays £360 for 12 months (£378 by 12 Direct Debits), and zero-emission vans fall in the same categories
- The Congestion Charge is £18 a day from 2 January 2026, so daily city work adds up
- If you're self-employed and use flat-rate simplified expenses for a vehicle, you must keep using them for that vehicle as long as you use it for the business
- Employees whose employer pays less than the approved rate can claim the difference as tax relief
Driving for work adds a layer of rules and costs on top of ordinary driving: mileage claims, van tax rules, and city charges that add up fast when you are on the road every day. This guide covers sole traders, employees who drive for work, and van owners, with the relevant calculator at each stage.
1Claiming mileage the right way
HMRC's approved mileage rates for the 2026/27 tax year are:
| Vehicle | First 10,000 business miles | Over 10,000 business miles |
|---|---|---|
| Cars and vans | 55p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
The first-10,000-mile rate for cars and vans rose from 45p to 55p from 6 April 2026. The 10,000-mile threshold applies to each tax year (6 April to 5 April). As an example from GOV.UK, 11,000 business miles in 2026/27 gives (10,000 × 55p) + (1,000 × 25p) = £5,750.
The rate covers your running costs. GOV.UK says that if you claim the approved rate, you can't also claim fuel, electricity, vehicle tax, MOTs or repairs separately for those miles. You can still claim some other travel costs, such as parking and train fares, on top (check the rules for your situation).
If you carry a fellow employee on a journey that is also a business journey for them, a payment of up to 5p per passenger per business mile can be made on top of your own mileage rate.
📋 Use the HMRC Business Mileage Calculator →
2Your own car, a company car, or a van?
If you drive your own car for business, mileage claims compensate you. A company car works differently: your employer usually reimburses business fuel using HMRC's advisory fuel rates, which are reviewed regularly. From 1 September 2026, petrol cars are 14p a mile up to 1400cc, 17p for 1401–2000cc and 27p over 2000cc, and diesel cars are 15p up to 1600cc, 16p for 1601–2000cc and 22p over 2000cc. For fully electric cars the rates are 7p a mile for home charging and 15p for public charging. These change, so check GOV.UK advisory fuel rates for the current figures.
If you have a company car for private use too, you pay Benefit-in-Kind tax, which is calculated differently again.
🚘 Use the Company Car Tax (BIK) Calculator →If you're weighing up buying a vehicle for the business rather than claiming mileage on a personal car, the finance terms matter as much as they would for a personal purchase.
💳 Use the PCP & HP Car Finance Calculator →3Van-specific rules you need to know
Vans (light goods vehicles up to 3,500kg) are taxed on a different table from cars. For vans registered on or after 1 March 2001, GOV.UK lists £360 for a single 12-month payment, £378 for 12 monthly Direct Debits in total, £198 for 6 months, or £189 for 6 months by Direct Debit. Older vans that meet Euro 4 (registered 1 March 2003 to 31 December 2006) or Euro 5 (registered 1 January 2009 to 31 December 2010) standards pay a reduced £140 for 12 months.
GOV.UK's van table says each category also includes zero-emission vehicles, with no separate nil rate, so electric vans are taxed in the same categories. Check the current table before you budget for a van.
🚐 Use the Van Road Tax Calculator →
4City driving costs when driving is your job
If you drive into cities every day for work, charges and parking fines can become one of your biggest costs because they are incurred daily. The London Congestion Charge rose from £15 to £18 a day on 2 January 2026 (electric cars registered for Auto Pay get a 25% discount). Check Transport for London for the current charge, hours and any discounts or exemptions that apply to your vehicle.
🏙️ Use the Congestion Charge Calculator → 🅿️ Use the Parking Fine (PCN) Calculator →For council parking tickets, GOV.UK says the charge is reduced if you pay within 14 days in some cases, so check the notice for the deadline and amount. Private parking charges follow their own terms. Check each notice carefully and don't ignore it.
5Fuel and EV costs at business mileage levels
Fuel matters more for high-mileage drivers because every per-mile difference is multiplied across many more miles. As an illustration at today's UK average prices (14 October 2026), 20,000 miles a year at 45 MPG costs about £3,500 in petrol (174.1p per litre) or about £4,020 in diesel (199.1p per litre), and an electric car charged at home on a standard tariff (26.32p per kWh) at 3.5 miles per kWh costs about £1,500. Your own figures will differ with your car, speeds and where you charge.
⛽ Use the Fuel Cost Calculator → ⚡ Use the EV vs Petrol Calculator →High-mileage drivers who can charge at home often see the biggest savings from an electric car, but charging only at rapid public chargers can cost as much as petrol. See our electric car ownership guide.
6Record-keeping mistakes that cost you at tax time
Good records protect a claim. For an employee's mileage claim, GOV.UK says to keep the dates and mileage of work journeys, grouped by vehicle type, and for each journey the reason, the start postcode and the end postcode. Keep the log as you go rather than rebuilding it from memory at tax return time.
- Mixing business and personal journeys without separating them in the log
- Estimating mileage afterwards instead of recording it at the time
- Claiming the approved rate and separate fuel or repair costs for the same miles
- Counting commuting: travel to and from your normal workplace doesn't count as business mileage unless it is to a temporary place of work
- Switching methods for the same vehicle without understanding the rules (see below)
7Self-employed vs employed: how claiming differs
If you're self-employed, you can use simplified expenses (flat-rate mileage) or claim your actual vehicle costs. You don't have to use flat rates for every vehicle, but once you use them for a vehicle, GOV.UK says you must continue to do so as long as you use that vehicle for your business. You can't use simplified expenses for a vehicle if you have already claimed capital allowances on it, or if its costs were already included as an expense when working out your profits. Simplified expenses cover cars, goods vehicles such as vans, and motorcycles.
If you're employed and use your own vehicle for work, you can claim tax relief if your employer pays you less than the approved rate for your business miles, or nothing at all. You claim the difference between the approved amount and what your employer paid. You can claim for the current tax year and the previous four, if eligible, either through HMRC's online service or through your Self Assessment return if you complete one.
Business driver checklist
- Mileage log kept as you go, with date, reason, start and end postcodes, and miles for each journey
- Clear on whether you use flat-rate simplified expenses or actual costs for each vehicle, and not mixing them
- Van tax checked against GOV.UK's van table, not assumed to match car rules
- Congestion Charge and parking costs included in the real cost of city work
- If employed and using your own car, checked whether your employer's payment is below the approved rate
- Fuel or EV cost comparison run on your actual annual business mileage
- Speak to HMRC or an accountant if you're unsure which rules apply to you
Frequently asked questions
How much can I claim per mile for business driving in the UK?
For 2026/27, 55p per mile for the first 10,000 business miles in the tax year and 25p per mile after that, for cars and vans. Motorcycles are 24p a mile and bicycles 20p. The 55p rate applies from 6 April 2026; before that the first 10,000 miles were paid at 45p.
Can I claim mileage and fuel receipts separately?
No. GOV.UK says the approved rate covers running costs, so you can't also claim fuel, electricity, vehicle tax, MOTs or repairs separately for the same business miles.
Is van road tax the same as car road tax?
No. GOV.UK has a separate table for vans (light goods vehicles). For vans registered on or after 1 March 2001 the 12-month rate is £360 (£378 by 12 monthly Direct Debits), with a reduced £140 rate for certain Euro 4 and Euro 5 vans.
What if my employer pays me less than the approved mileage rate?
You can claim tax relief on the difference between the approved rate and what your employer paid you, for the current tax year and the four before, through HMRC's online service or your Self Assessment return.
Can I switch between simplified expenses and actual costs?
Not for the same vehicle once you use flat rates: GOV.UK says that if you start using simplified expenses for a vehicle you must continue to as long as you use it for your business. Choose the method carefully at the start and ask an accountant if unsure.
All tools referenced in this guide
Sources
- GOV.UK — Travel — mileage and fuel rates and allowances
- GOV.UK — Simplified expenses: vehicles
- GOV.UK — Tax relief for employees: vehicles you use for work
- GOV.UK — Other vehicle tax rates (vans)
- GOV.UK — Advisory fuel rates (from 1 September 2026)
- GOV.UK — Parking tickets
- Transport for London — Changes confirmed to the Congestion Charge
- Fuel Finder UK — UK Fuel Price Index (14 October 2026) and Ofgem — Energy price cap from 1 October 2026
Prakash
Prakash is the founder and editor of UK Driving Tools. He maintains the site's calculators and guides and checks the rates and rules they use against official UK sources, such as GOV.UK, the DVLA, HMRC and Transport for London, before publishing.
Pages are drafted with the help of AI tools and then checked by the editor. He isn't a lawyer, accountant or UK-qualified adviser, so every page lists its sources and states what its calculator can't tell you. Nothing on this site is legal or financial advice.
Pages on UK Driving Tools are drafted with the help of AI tools. Before publishing, the figures and rules on each page are checked against the official source named on the page, and calculator examples are tested against the working formula. Pages are updated when rates or rules change. Our Editorial Policy explains the full process, including how to report a mistake.
Spotted a mistake or an out-of-date rate? Let us know and we'll check it against the official source.