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Guideby Gair

Understanding Your HMRC Mileage Deduction

The HMRC Approved Mileage Allowance Payment (AMAP) scheme is one of the most straightforward tax reliefs available to UK drivers - but a surprising number of people who are entitled to it never claim it. This guide explains who qualifies, what the rates are, what counts as business mileage, and how to calculate your deduction.

The rates

For the 2025–26 tax year, HMRC's approved mileage rates are:

  • Cars and vans: 45p per mile for the first 10,000 business miles, 25p per mile after that
  • Motorcycles: 24p per mile (flat rate, no threshold)
  • Bicycles: 20p per mile

These rates have been frozen since 2011, which is a mild annoyance given that fuel costs have roughly doubled since then - but they're still a meaningful deduction, especially if you're putting in high mileage.

What does "business mileage" actually mean?

This is where a lot of people get confused. The key rule is that business mileage is travel you do in the course of your work - it is not your commute.

For a typical employee: driving from your home to your regular office is commuting and you can't claim it. But driving from your office to visit a client, or from one work site to another, counts as business mileage.

For self-employed gig workers, the picture is simpler. If you're an Uber driver, Deliveroo rider, or Amazon Flex courier, every mile you drive during your working shift is business mileage - including deadmiles (driving to pick up a delivery, for example). Your home is your base of operations, so journeys from home to your first job and from your last job home can also qualify.

The 10,000-mile threshold

The threshold applies per tax year, which in the UK runs from 6 April to 5 April. If you hit 10,000 business miles before 5 April, every mile after that is claimed at 25p instead of 45p.

At 45p per mile, 10,000 miles gives you a £4,500 deduction. That's real money. At 25p for the miles beyond that, each additional 1,000 miles is worth £250 off your tax bill.

How does the deduction actually work?

The mileage deduction reduces your taxable profit, not your tax bill directly. If you're a basic rate taxpayer (20%), a £4,500 mileage deduction reduces your tax bill by £900. If you're a higher rate taxpayer (40%), it's £1,800.

On your Self Assessment return, you enter your total business miles on the Self-employment pages. HMRC applies the approved rates automatically. You don't need to show your calculations - you just need to have records if they ask.

What records do you need to keep?

HMRC doesn't prescribe a specific format, but your mileage log should include:

  • Date of each journey
  • Start and end locations (postcodes are fine)
  • Business purpose (e.g. "Uber shift", "client visit", "Amazon Flex route")
  • Miles driven

You need to keep these records for at least five years after the relevant tax return deadline. HMRC can ask to see them in an investigation, and a handwritten log in a notebook is perfectly acceptable - though GPS evidence from an app like MileClear is considerably more convincing.

Employees vs self-employed

If you're an employee who uses their personal vehicle for work, your employer can pay you up to the AMAP rates tax-free. If your employer pays you less than the approved rate (or nothing), you can claim the difference as a Mileage Allowance Relief deduction - same calculation, just a different box on your Self Assessment return.

If you're self-employed, you claim it as a business expense under the simplified expenses method (which is what the AMAP rates are). You can't also claim actual fuel costs and vehicle expenses separately - it's one or the other. For most drivers, AMAP wins.

How MileClear calculates it

Every trip you classify as "business" in MileClear gets counted towards your annual total. The app tracks your cumulative business mileage per tax year across all your vehicles, applies the 45p rate until you hit 10,000 miles, then switches to 25p automatically. You can see your running deduction total on the Work dashboard at any time.

When you export at the end of the year, the PDF includes a vehicle-by-vehicle breakdown of your business miles, the deduction calculations, and the tax year totals - everything you need for your Self Assessment return in one document.

One more thing

If you haven't been tracking your mileage but you do drive for work, it's worth going back and estimating what you might have been owed for previous tax years. You can amend a Self Assessment return up to four years after the original filing deadline. Just something worth knowing.