If you drive your car for business reasons, you can claim business mileage as an expense on your tax return. Grab a copy of my easy-to-use FREE BUSINESS MILEAGE LOG TEMPLATE and learn how to keep track of your business travel.
Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.
What is a Business Mileage Log?
If drive your personal car for business reasons, then you need to keep track of your business mileage – not just for tax purposes but also so you can keep an eye on your business’s profitability.
In the UK, instead of claiming petrol, you claim an amount per mile that you travel as a tax-deductible expense, depending on the type of vehicle you drive which covers the cost of petrol as well as wear & tear.
The amount you can claim per mile is set by HMRC. The mileage rates for 2024 are:
- Cars and electric cars: 45 pence per mile for the first 10,000 miles, 25 pence thereafter
- Motorcycle: 24 pence per mile
- Bicycles: 20 pence per mile
You don’t need to keep petrol receipts but you do need to keep a business mileage log.
A business mileage log can be a simple spreadsheet which lists where you have driven and acts as evidence to HMRC that your travel was business-related and a legitimate tax expense.
It must include the following details for each trip:
- Date of trip
- Destination
- Number of miles travelled
- Reason for the business trip
- Claim per mile
It’s worth noting that there are subscription-based mileage tracking apps available for your phone, like driversnote. If you are making lots of trips in your car it can become difficult to track your journies on a spreadsheet so an app could make things easier. Alternatively, some accounting software, like Quickbooks or Freshbooks, offer mileage tracking options which integrate with your business expense management.
READ MORE >>> Can I Buy a Car Through My Business as a Sole Trader?
Free Business Mileage Log Template
The good news is keeping a mileage log isn’t complicated and you can grab a copy of my BUSINESS MILEAGE LOG TEMPLATE for FREE!
You can open the template in gsheets, if you prefer – download the Excel version, open gsheets and choose the option to import the file.
How to Use the Business Mileage Log
Step 1:
Open the mileage log template in Excel or gsheets.
I’d recommend you have one mileage log for each financial year (which will most likely be the tax year** if you’re self-employed). That way you have the total figures ready to transfer to your tax return in one Excel sheet.
So save your template using the end of your financial year, for example: Mileage Log 2023 or Mileage Log 5 April 2024
**the tax year runs from 6 April to 5 April each year
Step 2:
For each journey, fill in all the details of your trip on the spreadsheet, including distance in miles. The spreadsheet is set up to calculate your mileage at 45p per mile but you may need to change this if your car mileage exceeds 10,000 miles or you drive a bicycle/motorcycle.
There is a formula at the bottom that calculates your total mileage claim for the financial year, ready for you to transfer to your tax return.
One of the biggest challenges when you’re busy working for yourself can be remembering to update the mileage log. So you need to commit to remembering to log your mileage onto the spreadsheet so you don’t forget about your journies and end up losing out on your tax savings.
I tend to send myself an email when I have taken a trip with basic details of the journey and then update my mileage log template when I catch up on my bookkeeping, to stop me forgetting where I’ve driven.
What Counts as a Business Journey for Tax Purposes
For tax purposes, you can usually claim for business travel outside of your normal business commute (this is called ‘irregular travel’).
IRREGULAR TRAVEL
Irregular travel could include visits to a potential new client, meeting with a supplier or going to a one-off training course. If you are a freelancer working at a client’s premises regularly, then travel to your client may not be a tax deduction because your client’s premises may count as your permanent workplace.
READ MORE >>> Claiming Travel as a Business Expense
How to Claim Business Mileage On Your Tax Return
You can claim tax relief for your mileage in the self-employment section of your tax return. If your business turnover is less than £85,000 you only need to enter one figure for your expenses, so you include your total mileage claim in in this number.
If your business turnover is more than £85,000, you’ll need to enter a breakdown of all your expenses in the boxes set out by HMRC, so you include business mileage in the ‘car, van and travel expenses‘ box.
Want to Read More About Claiming Expenses?
If you’ve enjoyed this post you may like to read more about claiming expenses. Here are some of my most popular blog posts on this topic…
- Are Training Costs Tax Deductible for the Self-Employed?
- How to Claim for Working from Home if You’re Self-Employed
- How to Complete The Self-Employment Section of Your Tax Return
Any Questions?
I’d love to help if you have any questions about this topic. Feel free to ask over in my group ‘The Self-Employed Club‘.
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