Sylvie Willis
If you're self-employed, you can claim fuel expenses as part of your mileage allowance. HMRC provides two methods for claiming self-employed car expenses: a flat per-mile rate or claiming all actual business car expenses. The flat rate covers all vehicle costs, including fuel, servicing, repairs, maintenance, depreciation, insurance, and road tax. This method simplifies the process of claiming mileage for business purposes. However, it is important to note that you cannot use simplified expenses if you have already claimed capital allowances for your vehicle. On the other hand, claiming actual expenses allows you to deduct the exact costs of fuel and other vehicle-related expenses but may be more time-consuming to calculate.
How much can I claim for fuel if I'm self-employed?
| Characteristics | Values |
|---|---|
| Mileage allowance for self-employed | 45p per business mile for the first 10,000 miles |
| Mileage allowance for self-employed after 10,000 miles | 25p per business mile |
| Mileage allowance for additional passengers | 5p per mile for each extra passenger |
| Flat-rate mileage allowance | Covers all vehicle costs, including fuel, servicing, repairs, maintenance, depreciation, insurance and road tax |
| Actual cost scheme | Reimbursement of actual fuel costs for business trips |
| VAT on fuel | Claimable as part of mileage allowance |
| Advisory Fuel Rates (AFR) | Applicable when a limited company owns the vehicle |
| Record-keeping | Mileage logs and expense records must be maintained for tax purposes |
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What You'll Learn
Claiming for fuel as a self-employed worker
As a self-employed worker, you can claim a mileage allowance from HMRC for using your personal vehicle for business purposes. HMRC provides two methods to claim self-employed car expenses: a flat per-mile rate or claiming all your actual business car expenses.
If you choose to claim mileage at a flat per-mile rate, you can claim 45p for the first 10,000 miles you travel and then 25p for every mile after that. You can also claim the VAT on the fuel element of the mileage allowance, which ranges from 5p per mile for a fully electric car to 25p per mile for petrol cars. If you have a passenger who also works for your business travelling with you, you can claim an additional 5p per mile.
If you choose to claim all your actual business car expenses, you can claim the actual costs of your travel, including fuel, insurance, repairs, and parking. This method may be better if you have high vehicle expenses, but it is more time-consuming.
It is important to note that you cannot claim mileage allowance for personal journeys or for travel between your home and your usual place of work. Journeys must be "wholly and exclusively" for business purposes.
You can also claim other travel expenses such as train fares, flights, and taxis, which are claimed independently of the mileage allowance.
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Calculating mileage allowance
As a self-employed worker, you can claim a mileage allowance from HMRC for using your personal vehicle for business purposes. There are two methods through which you can claim self-employed car expenses:
Flat per-mile rate:
The flat rate is meant to cover all vehicle costs, including fuel, servicing and repairs, maintenance, depreciation, insurance, and road tax. This method is often referred to as simplified expenses and is a popular choice due to its simplicity. The flat rate for a self-employed worker who travels 13,000 miles per year in their van for business, for example, is 45p for the first 10,000 miles and then 25p for the remaining 3,000 miles. You can also claim the VAT on the fuel element of the mileage allowance, which ranges from 5p per mile for a fully electric car to 25p per mile for petrol cars.
Claim actual business car expenses:
This method involves recording all costs incurred from using your vehicle for business-related driving. At the end of the tax year, you can deduct these costs from your company's taxable profit. This way of claiming vehicle costs is more time-consuming but may be better if your vehicle expenses are high.
It is important to note that you cannot use simplified expenses if you have already claimed capital allowances for your vehicle or included it in your business expenses. Additionally, if you use the simplified expenses method, you cannot switch to actual vehicle costs as long as you use that vehicle for work. You can, however, switch from actual vehicle costs to simplified expenses.
Other allowable travel expenses that can be claimed independently of the mileage allowance include train fares, flights, taxis, accommodation, meal prices, car hire charges, and parking fees.
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Claiming for other travel expenses
If you're self-employed, you can claim mileage allowance from HMRC for using your personal vehicle for business purposes. There are two methods to do this: claim mileage at a flat per-mile rate or claim all your actual business car expenses.
The flat rate covers all vehicle costs, including fuel, servicing, repairs, maintenance, depreciation, insurance, and road tax. For cars and vans, the flat rates are 45p per mile for the first 10,000 miles you drive in a year and then 25p for each subsequent mile. If you use a motorbike, the flat rate is 24p per mile. You can also claim the VAT on the fuel element of the mileage allowance.
You can also claim other travel expenses on top of your vehicle expenses, such as train journeys, flights, and parking fees. These are claimed independently of the mileage allowance. These include:
- Accommodation and meal prices for business trips
- Car hire charges
- Transportation to and from business meals
- Public stenographer's fees
- Computer rental fees
HMRC defines a temporary place of work as a workplace the worker attends for less than 40% of their working time for a limited duration (such as a meeting) or for less than 24 months. You can claim travel expenses for travel to temporary places of work.
It is important to note that you must keep records of your travel expenses, including receipts, invoices, and other relevant documents, for at least three years from the filing date.
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Using the flat rate for mileage
If you are self-employed, you can claim a mileage allowance from HMRC for the usage of your personal vehicle for business purposes. The flat rate for mileage is meant to cover all vehicle costs, including fuel, servicing and repairs, maintenance, depreciation, insurance, and road tax. This method is also referred to as the simplified expenses method.
The flat rate is a predetermined amount of money for business vehicle costs. It is a fixed rate per mile that can be claimed back as an allowable business expense on a self-employed person's tax return. The flat rate is beneficial if you do not have the receipts or records required to claim actual expenses. It is also easier to use and requires very little record-keeping.
However, one drawback is that it may not accurately reflect the actual costs of using your personal vehicle for business purposes. The flat rate is meant to simplify the process of claiming mileage for self-employed workers, saving them from having to keep track of the proportion of time that they use their vehicle for business and personal purposes, as well as the proportionate expenses incurred.
To use the flat rate for mileage, you must continue to do so for as long as you use that vehicle for your business. You can, however, switch from actual vehicle costs to simplified expenses. You can claim other travel expenses on top of the flat rate, such as train journeys, parking fees, car hire charges, accommodation, and meal prices for work-related trips.
You should also note that you can claim the VAT on the fuel element of the mileage allowance. Depending on the type of vehicle you are driving, this may range from 5p per mile for a fully electric car to 25p per mile for petrol cars.
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Claiming for business-related driving
As a self-employed person, you can claim a tax deduction on all your business-related driving. HMRC provides two methods to claim self-employed car expenses:
Flat per-mile rate
This is a flat-rate scheme that offers a much simpler way of claiming for business journeys made by road. The flat rate is meant to cover all vehicle costs, including fuel, servicing and repairs, maintenance, depreciation, insurance, and road tax. The rate depends on the type of vehicle you are driving and is issued by HMRC on a quarterly basis. For example, this may range from 5p per mile for a fully electric car to 45p per mile for the first 10,000 miles and 25p per mile for petrol cars. You can also claim an additional 5p per mile for each additional passenger as long as they work for your business.
Claim all actual business car expenses
This method is more time-consuming as you will need to record and calculate all costs incurred from using your vehicle for business-related driving. At the end of the tax year, you will be able to deduct these costs from your company's taxable profit. This method might be better if your vehicle expenses are high due to high road tax, insurance, fuel consumption, etc.
Other allowable travel expenses
Regardless of the method chosen, you can also claim other allowable travel expenses such as train or airfares, car hire charges, parking fees, accommodation, and meal prices for work-related trips.
Important notes
- Journeys must be "wholly and exclusively" for business purposes.
- You cannot claim mileage allowance for personal journeys or journeys to and from your usual place of work.
- You must retain proof and maintain accurate records of your claims in case HMRC asks to review them.
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Frequently asked questions
You can claim fuel expenses as part of your mileage allowance. The HMRC mileage allowance for self-employed workers is 45p for the first 10,000 miles and then 25p for every mile after that.
You can calculate your mileage allowance by multiplying the number of business miles you've driven in a year by the rate per mile. For example, if you drove 3,000 business miles in a year, you would multiply 3,000 by 0.45, which would give you £1,350.
Mileage allowance is designed to cover all vehicle costs, including fuel, servicing, repairs, maintenance, depreciation, insurance, and road tax.
Yes, you can claim other travel expenses such as train or plane tickets, taxi rides, car hire charges, parking fees, toll fees, accommodation, and meal prices for work-related trips.
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