The two methods
| HMRC mileage rate | Actual costs | |
|---|---|---|
| What you claim | Business miles × a flat rate | Fuel, insurance, repairs, servicing, road tax, MOT and similar, times your business share, plus capital allowances on the vehicle |
| Cars and vans | 55p a mile for the first 10,000 business miles in 2026/27 (45p before 6 April 2026), then 25p | Real costs |
| Motorbikes | 24p a mile | Real costs |
| Bicycles | Not covered | Real costs |
| Records | Mileage log | Receipts plus total and business miles |
| Can you change later? | Not for the same vehicle once you use the mileage rate | |
The rules are on GOV.UK: simplified expenses for vehicles, travel and vehicle expenses and, for a vehicle you buy, capital allowances on business cars. HMRC's Business Income Manual lists the rates for each year.
55p was announced on 21 May 2026 with effect from 6 April 2026 and is to be legislated in the Taxation (Energy and Vehicles) Bill. See the GOV.UK announcement, and check this page again before you file your 2026/27 return.
Worked examples
Each example is worked out by the same engine as the calculator, for 2026/27 in England, with no other income and fuel at 140p a litre. They're examples, not advice for your situation.
Lower mileage, newer car
£20,000 earned, 5,000 delivery miles out of 12,000 a year, 45 MPG, £1,500 insurance, £800 servicing and repairs.
| Mileage rate | Actual costs | |
|---|---|---|
| Amount claimed | £2,750.00 | £1,665.50 |
| Tax and National Insurance | £1,216.80 | £1,498.64 |
The mileage rate gives the lower bill here, by £281.84.
Full-time, high mileage, older car
£35,000 earned, 25,000 delivery miles out of 26,000 a year, 35 MPG, £3,000 insurance, £2,500 servicing and repairs.
| Mileage rate | Actual costs | |
|---|---|---|
| Amount claimed | £9,250.00 | £9,834.55 |
| Tax and National Insurance | £3,426.80 | £3,274.70 |
Actual costs gives the lower bill here, by £152.10.
Motorbike rider
£18,000 earned, 9,000 delivery miles out of 10,000 a year, 90 MPG, £900 insurance, £450 servicing and repairs.
| Mileage rate | Actual costs | |
|---|---|---|
| Amount claimed | £2,160.00 | £1,851.45 |
| Tax and National Insurance | £850.20 | £930.28 |
The mileage rate gives the lower bill here, by £80.08.
When actual costs can win
- You drive well over 10,000 business miles a year, so most miles only get 25p.
- Your vehicle is thirsty or expensive to insure and repair.
- You bought the vehicle for the work and can claim capital allowances on it.
- You drive long Amazon Flex blocks: see the Amazon Flex tax calculator.
When the mileage rate usually wins
- Fewer business miles in an economical car or a motorbike, common for Deliveroo and Uber Eats couriers.
- You'd rather keep a simple mileage log than every receipt.
- Your costs are low enough that the £1,000 trading allowance beats both, as for many bike couriers (see the Just Eat example).
Compare with your own figures
Enter your miles, fuel economy, insurance and repairs. The "Best way to claim your costs" box shows both methods and the £1,000 trading allowance. If you've already claimed for this vehicle, open "Already claimed for this vehicle before?" and pick the method you used.