The Odometer Is Only the Starting Point: Making a Defensible Mileage Claim in 2026/27

For a sole trader or a company director, mileage is often the simplest expense to claim and one of the easiest to get wrong. The arithmetic is not difficult. The risk lies in the 10,000-mile threshold, the distinction between business and private travel, and the quality of the evidence behind the figure. HMRC does not require a diary entry for every trip, but it does expect a claim that can be explained if asked. This guide sets out how the simplified mileage rules work in 2026/27 and how to keep a claim defensible without turning the year into a logbook exercise.

The simplified rates in 2026/27

Under HMRC's simplified expenses regime, a sole trader using their own car or van can deduct 45p per business mile for the first 10,000 business miles in the tax year, then 25p per mile after that. Motorcycles are treated separately at 24p per mile and bicycles at 20p. The rates are intended to cover the running costs of the vehicle, including fuel or electricity, servicing, repairs, insurance, road tax and depreciation.

Company directors should think in terms of approved mileage allowance payments. If the company reimburses a director for business travel in the director's own car or van at or below the approved rates, the payment is generally tax-free and does not need to be reported as a benefit in kind. If the company pays more than the approved rate, the excess is normally taxable. The company should still record the reimbursement, the date and the business purpose in the same way as any other expense.

The same rates apply to electric vehicles. There is no higher simplified rate for an electric car or van. The rate is designed to cover electricity as one of the vehicle's running costs.

Why the 10,000-mile mark matters

The 10,000-mile point is a change in rate, not a change in eligibility. Business miles up to 10,000 are claimed at 45p; business miles above that are claimed at 25p. The calculation should be applied to the year as a whole, not to each journey.

A simple example makes the point. A sole trader drives 12,000 business miles in 2026/27. The claim is 10,000 miles at 45p, or £4,500, plus 2,000 miles at 25p, or £500. The total is £5,000. Claiming 45p on all 12,000 miles would produce £5,400 and an overclaim of £400. Claiming 25p on every mile would underclaim. Neither outcome is desirable, and both are avoidable with a running total.

For a director, the company should apply the same step-down when reimbursing mileage. If payroll or expense software applies 45p to the whole year, the error should be corrected before the accounts are finalised. The 10,000-mile threshold applies to business miles, not to total miles shown on the odometer.

Business, private and commuting

Ordinary commuting between home and a regular workplace is private travel. It is not business mileage, even if the journey is necessary to do the job. Travel to a client, a site or a temporary workplace can be business travel, but the facts matter. A detour to collect shopping or visit a gym is private. If a journey mixes business and private purposes, only the business proportion should be claimed.

Sole traders sometimes assume that any journey from home is business travel because they work from home. That is not automatically true. If home is the business base, journeys from home to temporary client locations may be business journeys, but the position depends on the pattern of work and the nature of the base. Directors and employees face tighter rules on temporary workplaces. The practical answer is to record the purpose of each journey and to be consistent. A claim that says only 'travel' or 'site visits' without a destination or reason is harder to defend.

Records that support the number

HMRC does not prescribe a single format for mileage records. A spreadsheet is acceptable. A mileage app is acceptable. A notebook is acceptable if it is complete and contemporaneous. What matters is that the record is made at or near the time of travel and that it can be reconciled with the rest of the business records.

A useful record includes the date, the vehicle, the start and end location, the business purpose, the miles travelled and whether the journey was one way or a return. It is also sensible to note the odometer reading at the start and end of the tax year and, for higher-mileage businesses, at monthly intervals. Calendar entries, appointment confirmations, invoices and site notes can all support the mileage log without duplicating it.

Fuel and charging receipts are not strictly needed to calculate a simplified mileage claim, because the rate is the calculation. They are still worth keeping as corroboration, particularly for a high-mileage vehicle or an electric vehicle with significant home charging. Parking fees and tolls should be recorded separately if they are claimed as business expenses. Parking fines and penalties are not allowable.

Do not mix mileage with actual running costs

The simplified mileage rate and actual running costs are alternatives for the same vehicle. A sole trader who uses simplified mileage cannot also claim capital allowances, fuel, servicing, insurance, repairs or depreciation for that vehicle in the same period. Business parking and tolls can generally be claimed in addition, provided they are genuine business costs and not fines.

Electric vehicles are a common source of double counting. If a sole trader uses the 45p and 25p rates, the rate is treated as covering electricity, so a separate claim for home charging for the same business miles is not appropriate. A director should also avoid claiming both a company fuel or charging card and a mileage reimbursement for the same journey. If actual costs are used instead, the business proportion of electricity must be worked out on a reasonable basis and supported by charging records or meter readings.

Common mistakes to avoid

The most common errors are applying 45p to all miles, claiming ordinary commuting, using simplified mileage and actual costs for the same vehicle, and keeping no evidence of journey purpose. Others include claiming a journey twice, claiming fines, and assuming that an electric vehicle attracts a different simplified rate. A claim does not need to be perfect, but it should be consistent, proportionate and explainable.

A practical checklist for 2026/27

• Keep a running mileage log with date, destination, purpose and miles.
• Record odometer readings at the start and end of the tax year.
• Separate business miles from commuting and private travel.
• Apply 45p to the first 10,000 business miles and 25p thereafter.
• Use the same method for the whole vehicle for the period; do not mix with actual costs.
• For an electric vehicle, do not add home charging on top of simplified mileage.
• Keep parking and toll receipts separately; never claim fines.
• For company reimbursements, check the approved rate and record the business purpose.
• Review the log before the accounts or tax return are finalised.

A mileage claim is ultimately an evidence exercise. The rate is simple; the discipline is in the record. A sole trader or director who can show what was driven, why it was driven and how the total was calculated is in a much stronger position than one who relies on an annual estimate. That is the difference between a claim that is merely convenient and one that is defensible.