Simplified expenses or actual costs?
If you are self-employed, compare the flat HMRC mileage rate with your real running costs. Pick the method that leaves you better off for that vehicle.
How simplified vehicle expenses work
Sole traders and eligible partnerships can claim a flat rate per business mile instead of working out the business share of every invoice. For 2026/27 cars and vans that is 55p for the first 10,000 miles and 25p after. Motorcycles are 24p.
You cannot use simplified expenses for a vehicle you have already claimed capital allowances on, or included as an expense when working out profits. Parking, tolls and other travel (trains, hotels) can still be claimed on top.
Limited companies cannot use simplified expenses. Employees claiming for their own car use approved mileage rates or Mileage Allowance Relief instead.
Sources: simplified expenses for vehicles, self-employed travel expenses.
Quick answers
Who can use this?
Sole traders and partnerships with no company partners. Not limited companies.
Can I switch methods later?
Once you use the flat rate for a particular vehicle, you must keep using it while you use that vehicle for the business. You can still use actual costs for a different vehicle.