Driving to a client, a supplier or a site is one of the most common business costs there is — and one of the most commonly fumbled at tax time. Claim too little and you hand HMRC money you did not owe. Claim the wrong things, or keep no records, and you leave yourself exposed if anyone ever asks.

The rules are not complicated once you see the shape of them. This guide explains the approved mileage rates, what HMRC actually counts as business travel, what to record, and how the picture differs between sole traders and limited companies.

This is general information for UK businesses, not tax advice. Rates, thresholds and rules change and your situation is specific to you, so check the current figures on GOV.UK or confirm with a qualified accountant before you claim.

The two ways to claim for a car

If you use your own vehicle for work, there are broadly two methods. The first and simplest is the approved mileage allowance: you claim a set rate per business mile, which is designed to cover fuel, insurance, servicing, depreciation — the lot — in one flat figure. You keep a mileage log and multiply.

The second is the actual costs method: you total your real running costs for the year and claim the business-use proportion. This can produce a bigger claim for an expensive vehicle, but it demands far more record-keeping and, once you choose a method for a particular vehicle, you generally have to stick with it. For most small operators the simplicity of the mileage rate wins.

The approved rates differ by vehicle type and, for cars, drop to a lower rate after a certain number of business miles in the tax year. Because these figures are reviewed periodically, always confirm the current per-mile rates for cars, vans, motorcycles and bicycles on GOV.UK before you calculate.

Pick a method, keep an honest log, and your mileage claim becomes a five-minute job at year end rather than a guessing game.

What actually counts as business travel

This is where most mistakes happen. Business travel is journeys you make wholly and exclusively for work — driving to a client meeting, a temporary site, a supplier, the bank, or a job you are quoting for. Those miles are claimable.

What is not claimable is ordinary commuting: the trip from home to a permanent workplace. The grey area is the "temporary workplace" rule, which can make travel to a short-term site claimable in a way that travel to your regular base is not. If you work from home and travel out to varied locations, more of your driving may qualify — but the home-to-regular-workplace exclusion still bites, so apply the rule carefully and check the detail on GOV.UK.

Vans, motorcycles and bikes

The mileage system is not just for cars. Vans have their own approved rate, which matters for the many trades that live in one. Motorcycles have a separate rate again. And there is even an approved mileage rate for bicycles — genuinely useful for couriers, urban consultants and anyone cycling between jobs in a city.

Passengers count too: if you carry a colleague on the same business journey, there is a small extra per-mile amount you can claim on top. It is modest, but it adds up over a year of shared site visits.

A quick worked sketch shows why mileage is worth tracking. A mobile electrician covering, say, 8,000 business miles in a year, on top of all the train fares and parking, is sitting on a four-figure deduction once it is all added up — money that simply vanishes if no one keeps the log. The effort of a five-second note after each job is tiny against the tax it protects.

Other travel costs you can claim

Mileage is only part of the picture. When a journey is genuinely for business, you can typically also claim:

  • Train, bus, tram and air fares for business trips.
  • Parking at the destination (though not parking fines — those are never allowable).
  • Tolls and congestion or clean-air charges incurred on business journeys.
  • Accommodation and reasonable subsistence when a trip means staying away overnight.

Keep the receipts. These sit alongside your wider allowable business expenses, and treating them with the same discipline keeps your whole return clean and defensible.

The records HMRC expects

The mileage rate is generous precisely because it asks for one thing in return: evidence. For each business journey you should be able to show the date, the start and end points, the purpose, and the miles. A contemporaneous log — a notebook, a spreadsheet, or a mileage-tracking app that uses your phone's GPS — is far more credible than a number reconstructed from memory months later.

If an enquiry ever lands, a tidy log is the difference between a quick conversation and a painful one. This is the same habit that underpins everything else in your accounts, which is why we bang the drum for solid record-keeping and bookkeeping. Whatever you claim, keep the supporting records for the period HMRC requires.

Sole traders vs limited companies

The mechanics differ depending on your structure. A sole trader claims mileage and travel as a business expense that reduces taxable profit, and the figures feed straight into the Self Assessment return. Simple, direct, and the deadline discipline of Self Assessment applies.

For a limited company, things split. If you drive your own car on company business, the company can pay you the approved mileage rate tax-free as a reimbursement — clean and efficient. But if the company provides a car for you to use, you are into company car territory, with benefit-in-kind tax that is a different animal entirely; our guide to company car tax and benefits in kind explains when a company car helps and when reimbursed mileage is the smarter route. The right answer depends on the vehicle, the mileage and the numbers, so it is worth modelling both.

Frequently asked questions

Can I claim mileage for driving to my normal place of work?

No. Ordinary commuting from home to a permanent workplace is not allowable. Travel to a temporary workplace or directly to clients, sites and suppliers usually is. The distinction turns on the "permanent" versus "temporary" workplace rules, so check the detail on GOV.UK if you are unsure.

Can I claim both the mileage rate and my actual fuel costs?

No — the approved mileage rate is designed to cover fuel and all other running costs in one figure, so you cannot also claim fuel, insurance or servicing separately on top. You choose either the mileage method or the actual-costs method for a vehicle, not both.

What if I forgot to keep a mileage log?

Reconstruct it as accurately as you honestly can from diaries, invoices, calendar entries and job records, and start a proper contemporaneous log immediately. A defensible estimate built from real evidence is far better than a round number, but a contemporaneous record is always stronger if HMRC asks.

Travelling to win and deliver work is part of running a business — and for many SMEs, that work is increasingly public-sector. When you are ready to find contracts worth the journey, search live UK tenders on Tendarix and focus your time on the opportunities that fit.