How to Claim Business Mileage from HMRC when You’re Self-Employed

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self-employed mileage allowance

If you are self-employed and use your personal vehicle for business travel it’s important to claim your business mileage because it reduces your tax bill.

HMRC calls this the Self-Employed Mileage Allowance and sets out strict rules about:

  • What you can claim for;
  • How much you can claim;
  • The records you need to keep to back up your mileage claim.

Not only does the self-employed mileage allowance reduce your tax bill, but it is also a tax-free claim from your business covering the cost of fuel as well as wear and tear on your vehicle.

How to Calculate Your HMRC Business Mileage Claim

Here’s how you calculate your HMRC business mileage claim:

  1. Add up the number of business miles you have travelled

  2. Multiply the number of miles in Step 1 by the self-employed mileage allowance rate set by HMRC.

The HMRC self-employed mileage allowance rates for 2019/2020 are:

 First 10,000 MilesOver 10,000 Miles
Cars and vans45p25p
Motor cycles24p24p
Bicycles20p20p

Example:

You make a 100 mile round trip to visit a client using your own car.

You can claim back £45 for the journey (100 miles x 45p per mile)

What Does the Self-Employed Mileage Allowance Cover?

The self-employed mileage allowance covers the cost of wear and tear on your vehicle as well as fuel, MOT and servicing.

So if you cannot claim for any additional costs on you personal vehicle through your business.

How to Claim Business Mileage from HMRC when You’re Self-Employed

You can claim for your business mileage on a regular basis or when you fill out your self-assessment tax return.

You need to keep a record of your business trip, so that might mean it is better to claim your business mileage on a regular basis so you don’t forget to claim anything you might be entitled to.

You claim needs to be supported by a record for each trip of:

  • Date
  • Location
  • Miles travelled
  • Reason for trip (for example customer or supplier name)

Always remember to keep as detailed a records as possible in case HMRC ask to look at your records. 

You can use a spreadsheet to track your business mileage. Here is a Mileage Claim Form Template to help get you started.

If you use your personal vehicle on a regular basis remembering to fill out your spreadsheet can get tricky.

Or worse, you end up forgetting to log business mileage.

Quickbooks Self-Employed has a built-in mileage tracker as part of their bookkeeping app.

The mobile app tracks you as you travel, automatically calculating how much business mielage you are entitled to claim back.

Can You Claim Business Mileage for Your Daily Commute?

No you cannot claim business mileage for your daily commute when you’re self-employed.

You can only claim for travel and mileage that you undertake away from your normal base of work.

Example 1:

You work from home and need to go and visit a potential new client.

You can claim for the cost of your travel from your home to your new client against your taxes.

Example 2:

You go self-employed and decide to rent out an office space.

You would not be allowed to claim travel from home to your to your office against your taxes. But if you had to make a one off visit a client you would be able to claim for travel costs between your office and the client.

Learn More: Claiming Business Travel When You’re Self-Employed

Updated 3 April 2019

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