Mileage Rates for Self-Employed Builders 2025/26

HMRC Mileage Rates for 2025/26

If you're self-employed and driving to sites, merchants, and meetings, you're racking up business miles. Claiming them properly can knock a decent chunk off your tax bill. But get it wrong and HMRC will want that money back — with interest.

Here's what you need to know for the 2025/26 tax year.

The Approved Mileage Rates

HMRC's approved mileage allowance payments (AMAPs) for the 2025/26 tax year are:

| Vehicle Type | First 10,000 Miles | Over 10,000 Miles | |---|---|---| | Car or van | 45p per mile | 25p per mile | | Motorcycle | 24p per mile | 24p per mile | | Bicycle | 20p per mile | 20p per mile |

These rates haven't changed since 2012, despite fuel prices going up significantly. There have been calls to increase them, but as of the 2025/26 tax year, they remain the same.

What the Rate Covers

The 45p/25p rate is designed to cover all running costs:

• Fuel
• Insurance
• Road tax
• MOT
• Servicing and repairs
• Depreciation
• Breakdown cover

If you claim mileage at the approved rate, you cannot also claim for any of the above separately. It's one or the other — mileage rates or actual costs. You can't mix and match.

Mileage Rates vs Actual Costs

You have two options for claiming vehicle expenses:

Option 1: Simplified Mileage (AMAPs)

Multiply your business miles by the approved rate. Simple, no receipts needed for fuel (but you still need a mileage log).

Example: 15,000 business miles in your car

(10,000 × 45p) + (5,000 × 25p) = £4,500 + £1,250 = £5,750 deduction

Option 2: Actual Costs

Claim the actual costs of running your vehicle, apportioned by business use percentage. This means keeping every receipt — fuel, insurance, road tax, repairs, tyres, the lot.

Example: Total vehicle costs £6,000, business use 80%

£6,000 × 80% = £4,800 deduction

In this example, the mileage rate gives a bigger deduction. That's often the case for older, cheaper vehicles with high mileage. For newer, more expensive vehicles (especially electric or hybrid), actual costs can work out better because of capital allowances.

Important: Once you've chosen a method for a vehicle, you must stick with it for the life of that vehicle. You can't switch from mileage to actual costs or vice versa.

Track your miles throughout the year with the Mileage Tracker so you're not scrambling to reconstruct your log at tax return time.

What Counts as Business Mileage

This is where many builders get it wrong. Not every journey in your van is a business mile.

Qualifies as Business Mileage

• Driving from one site to another during the working day
• Trips to builders' merchants for materials
• Driving to a supplier or client meeting
• Travel to training courses
• Trips to the tip/waste transfer station
• Visiting potential jobs for quoting
• Travel between your home and a temporary workplace (a site you'll work on for less than 24 months)

Does NOT Qualify

• Commuting — travel between your home and your regular place of work. For self-employed builders, this is less clear-cut because you don't usually have a fixed workplace. But if you work at the same site for more than 24 months, HMRC considers it your permanent workplace and travel there is commuting.
• Personal journeys — popping to the shops, school run, anything not related to business.
• Mixed journeys — if you stop at the supermarket on the way back from a site, only the direct business portion counts.

The 24-Month Rule

This catches out builders working on long projects. If you know (or it becomes clear) that you'll be working at the same site for more than 24 months, travel to that site stops being business mileage from the point it becomes clear. This applies even if the project ends up being shorter — it's about your expectation at the time.

Record Keeping

HMRC expects you to keep a contemporaneous mileage log. That means recording your journeys as they happen, not reconstructing them from memory in January.

Your log should include:

• Date of the journey
• Start point and destination
• Purpose of the journey (e.g., "Site visit — 42 Elm Street" or "Collect materials — Travis Perkins")
• Miles driven (use your odometer or a mapping app)

You can keep this in a notebook, a spreadsheet, or an app. The Mileage Tracker is designed for exactly this — log journeys on your phone and export the data for your accountant or self-assessment return.

How Long to Keep Records

Keep your mileage records for at least 5 years after the 31 January submission deadline for that tax year. See HMRC's record-keeping guidance for full details. If HMRC open an enquiry, they'll want to see your records.

Company Van Rules

If you operate through a limited company, the rules are different.

Company-Owned Van

If your company owns the van:

• The company claims all running costs as a business expense
• If you use the van for personal journeys (including commuting), there's a van benefit charge — £3,960 for 2025/26 (£0 for zero-emission vans)
• If the company also pays for private fuel, there's an additional van fuel benefit of £757

Advisory Fuel Rates (for Company Vehicles)

If you use a company vehicle and the company reimburses your fuel, HMRC publishes advisory fuel rates quarterly. As of December 2025:

| Engine Size | Petrol | Diesel | LPG | |---|---|---|---| | Up to 1,400cc | 13p | — | 11p | | 1,401cc to 2,000cc | 15p | 13p | 13p | | Over 2,000cc | 24p | 18p | 21p |

Electric vehicles have an advisory rate of 7p per mile.

Claiming Through Self-Assessment

If you're self-employed, you claim mileage on your Self Assessment tax return (form SA103 — self-employment supplementary page).

The mileage deduction goes in the "other allowable business expenses" section if you're using simplified expenses. If you're using actual costs, each cost type goes in its respective box.

For CIS and VAT queries related to your self-assessment, the VAT & CIS Calculator can help you work out your obligations.

Common Mistakes

1. Not Keeping a Mileage Log

This is the biggest one. Without a log, you have no evidence. If HMRC enquire, "I drove about 20,000 miles" won't cut it.

2. Claiming Commuting as Business Travel

If you're going to the same site every day for a year, that's your workplace. Travel there is commuting, not business mileage.

3. Rounding Up

HMRC won't look kindly on every journey being a suspiciously round number. Record actual miles.

4. Forgetting Passenger Payments

If you carry a colleague in your car on a business journey, you can claim an extra 5p per mile per passenger. Most builders don't know about this.

5. Switching Methods Mid-Vehicle

Once you use the mileage rate for a vehicle, you're locked in. Buying a new vehicle is your opportunity to switch methods if actual costs would be more advantageous.

6. Not Claiming at All

Plenty of self-employed builders don't claim mileage because they think it's too complicated. If you drive 15,000 business miles a year, you're leaving £5,750 in deductions on the table. At the basic tax rate, that's over £1,100 back in your pocket.

Quick Summary

1. HMRC rate: 45p/mile for the first 10,000 miles, 25p/mile after that
2. Covers all vehicle costs — you can't claim fuel receipts separately
3. Business miles include site-to-site travel, merchant runs, and quoting visits
4. Commuting to a long-term site (24+ months) does not count
5. Keep a mileage log with date, destination, purpose, and miles for every journey
6. Use the Mileage Tracker to log journeys as you go