How to Record Mileage for Taxes UK: A Simple Guide for Self-Employed Workers

Alan Bermingham

10 Years of Expertise in Fintech Innovation

8 min read

How to record mileage for taxes uk details statutory logbook standards, rate structures, and deduction methods governed by His Majesty’s Revenue and Customs. Self employed taxpayers and sole traders can calculate business travel using approved mileage allowance rates of 55p per mile for the first 10,000 miles and 25p per mile thereafter. Record keeping requires documenting the date, journey purpose, start and end postcodes, and total miles traveled for every business trip throughout the tax year. Maintaining accurate mileage records ensures valid claims under simplified expenses on form SA100, protecting taxpayers during HMRC compliance reviews. Utilising Open Banking tax applications like Pie streamlines mileage tracking by logging journeys automatically, matching business travel with bank records, and filing compliant Self Assessment returns directly to HMRC.

Let’s Break This Down Together...

Missing out on mileage claims because you’re not sure what really counts? Lots of people leave money on the table simply by not keeping proper records.

In this guide, we’ll cover exactly what HMRC counts as business mileage and how to record it the right way. You’ll also see the current mileage rates, best tracking methods, and common mistakes to avoid.

By the end, you’ll know how to maximise your tax savings while staying 100% compliant. Let’s get into it!

Introduction to Business Mileage

Business mileage is the distance you travel using your personal vehicle for business purposes, such as visiting clients, attending meetings, or making deliveries. For self-employed individuals, accurately tracking business trips is crucial to claim mileage allowance relief and reduce your tax bill.

HMRC allows you to claim vehicle expenses using two methods, though sole traders often wonder about checking whether you can backdate a mileage claim on your Self Assessment when filing for previous tax years.

To make the most of your mileage deduction, it’s essential to keep a detailed mileage log or mileage logbook. By logging your business mileage as you go, you’ll save time, maximise your tax benefits, and avoid missing out on valuable deductions.

What Counts as Business Mileage in the UK?

Not all driving is created equal in the eyes of HMRC. Your regular commute to a permanent workplace isn’t claimable. Journeys between different workplaces, client meetings, site visits, and work errands all count as business mileage that you can claim for. Employees using a company car must keep detailed records to separate business and private journeys, as private purposes are taxable.

If you’re visiting a temporary workplace (somewhere you’ll work for less than 24 months), that journey from home is typically claimable too. If you use your own vehicle for work, you can claim mileage for these trips, but must distinguish between business and private use.

The golden rule is: if you wouldn’t make the journey if you weren’t working, it’s probably business mileage. For example, driving to the supermarket for personal shopping is a private journey and should be recorded separately from business mileage to ensure compliance.

Choosing a Method for Claiming Mileage

When it comes to claiming mileage as a self employed person, you have two main options: the simplified expenses method or the actual expenses method.

The simplified expenses method is popular because it’s straightforward, you simply claim a fixed mileage allowance for every business mile you drive. This means you don’t need to keep receipts for every bit of fuel, maintenance, or repairs, just a clear mileage log showing your business trips.

On the other hand, the actual expenses method lets you claim a proportion of your real vehicle costs, including fuel, insurance, repairs, maintenance, and other vehicle expenses.

This approach can sometimes result in a higher deduction, especially if your vehicle costs are significant, but it does require you to keep detailed records of all your vehicle costs throughout the tax year.

Company Car Considerations

It’s essential to keep a detailed mileage log for all your business trips, clearly separating business mileage from any private purposes. Each entry in your log should include the date, odometer readings at the start and end of the trip, the purpose of the journey, and the total miles driven.

The standard HMRC mileage rate for company cars is 45p per mile for the first 10,000 business miles in a tax year, dropping to 25p per mile after that. Make sure you only claim for business mileage, not for private journeys. If your company reimburses you for fuel or electricity used on business trips, you can only claim the difference between your actual costs and what you’ve been reimbursed.

Accurate records are key, if HMRC ever asks for verification, a complete mileage log will show exactly how you calculated your claim. By keeping your logs up to date and following the correct procedures, you’ll avoid tax issues and ensure you’re claiming the right mileage allowance for your company car.

How to Record Your Mileage Properly

For each business journey, you need to note down the date you travelled and where you went (start and end points with postcodes).

You must also record why you went there (the business purpose), how many miles you drove, and which vehicle you used. Recording odometer readings at the start and end of each trip ensures accurate mileage logs.

Keep these records as you go – trying to remember details months later is asking for trouble. It’s important to capture all relevant data, such as dates, destinations, and the total number of miles driven, to maintain compliant mileage logs.

By logging your business mileage as you go, you’ll save time, maximise your tax benefits, and avoid missing out on valuable deductions. Accurate records also help ensure you claim all the money you are entitled to for your business mileage.

A simple notebook in your glovebox works, but mileage apps with GPS tracking are much easier and more accurate. While keeping detailed records may seem time consuming, using digital tools can streamline the process and reduce the effort required.

Current HMRC Mileage Rates

For cars and vans, you can claim 45p per mile for the first 10,000 business miles in the tax year. After that, it drops to 25p per mile.

Motorcycle journeys get a flat rate of 24p per mile, while bicycle trips earn you 20p per mile.

These rates cover everything including fuel, insurance, repairs, and depreciation, which pairs well with discovering hassle-free methods to pay when you simplify your tax once your overall liability is calculated.

I once forgot to track my switch from the 45p to 25p rate and had to recalculate an entire year's worth of journeys. Trust me, you don't want that headache!

Best Ways to Track Your Mileage

Dedicated mileage apps make life much easier. They use GPS to track your journeys automatically and can export reports for your tax return.

Spreadsheets work well too. Set up columns for all the required info and update it regularly.

Paper logbooks are old-school but effective. Keep one in your car and jot down details after each trip, while construction workers should also focus on understanding how to register for gross payment status and its impact on CIS tax deductions if they operate under the scheme.

Whatever method you choose, consistency is key. HMRC can ask to see your records up to six years later. Professional services, such as accounting or tax advisors, can assist with maintaining accurate mileage records and ensuring compliance.

Common Mistakes to Avoid

Don't claim for your normal commute. HMRC knows this is a common error and looks out for it.

Avoid rounding up your mileage. Modern mapping tools give precise distances, and HMRC knows it.

Don't forget to keep records as you go. Trying to recreate a year's worth of journeys from memory won't end well if you're questioned.

If your employer already pays you for mileage, you can only claim the difference if their rate is lower than the HMRC rate.

Final Thoughts

Getting your mileage claims right isn't complicated, but it does require a bit of organisation. The tax savings are well worth the small effort involved.

Start recording your journeys today, even if your tax return isn't due for months, keeping in mind how learning how AI tools flag compliance issues and what you need to know helps prevent automated inquiries.

Good mileage records not only maximise your legitimate tax claims but also protect you if HMRC ever comes knocking with questions.

Simplifying Mileage Records for Tax

Keeping track of your business miles shouldn't be a headache. The UK's first personal tax app makes it simple and stress-free.

Pie automatically tracks your journeys using GPS, distinguishing between business and personal trips based on your patterns and locations.

Our app creates HMRC-compliant records that link directly to your tax return, showing you in real-time how much each journey is worth in tax savings.

The app even reminds you to classify any journeys it couldn't automatically categorise, much like exploring the best accounting software for plumbers in a comprehensive guide tailored to trade-specific workflows.

Fancy seeing how it works? Take a look at Pie and discover how we're making tax simpler for everyone.