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Guideby Gair

Tracking Mileage for Work: Employee vs Self-Employed Guide

If you drive for work in the UK, you can almost certainly claim tax relief on your mileage. But the rules differ depending on whether you're self-employed or PAYE-employed, and the right approach to tracking is different for each. This guide covers both.

If you're self-employed

Self-employed drivers - sole traders, gig delivery riders, private hire drivers, tradespeople, contractors - claim mileage as a business expense on Self Assessment. HMRC's Approved Mileage Allowance Payment (AMAP) lets you deduct:

  • 45p per mile for the first 10,000 business miles in a tax year (cars and vans)
  • 25p per mile thereafter
  • 24p per mile flat for motorbikes
  • 20p per mile flat for bicycles

The deduction comes off your taxable profit. For a 15,000-mile-a-year self-employed driver, that's £5,750 off the top - worth £1,150 to £2,300 in tax back depending on your band.

It goes on the SA103S box 20 or SA103F box 21 (the travel expenses line) of your Self Assessment, marked under simplified expenses. See our full SA103 guide for the boxes.

The self-employed mileage tracker page has a full walkthrough.

If you're a PAYE employee

PAYE employees - people who get a payslip with tax taken at source - have a different but related route: Mileage Allowance Relief (MAR).

If your employer pays you a mileage rate for business journeys, but pays you less than HMRC's AMAP rate, you can claim the difference back from HMRC. Example:

  • Your employer pays 25p per mile for business driving
  • HMRC's AMAP rate is 45p per mile (for the first 10,000 miles)
  • The 20p per mile gap is what you can claim back as Mileage Allowance Relief

For 5,000 business miles a year, that's £1,000 in relief - worth £200 at basic rate, £400 at higher rate.

If your employer pays you nothing for business mileage (rare but it happens), you can claim the full AMAP rate as MAR.

If your employer pays more than the AMAP rate, the excess is taxable as a benefit in kind - the opposite direction. You don't claim MAR but you may need to declare the excess.

PAYE employees claim MAR on the P87 form (online via gov.uk) for claims under £2,500 a year, or through Self Assessment if it's over £2,500 or you already file Self Assessment for other reasons.

The employee mileage tracker page covers the P87 process in detail.

What counts as a business journey - same for both

The definition of "business mileage" is the same for self-employed and PAYE. A business journey is one driven wholly and exclusively for work purposes. Key rules:

  • Commute is never claimable. Home to your normal workplace = ordinary commuting. Not deductible whether you're employed or self-employed.
  • Site-to-site is claimable. Once you're at work, any further driving for work is business mileage.
  • Temporary workplaces are claimable. If you're temporarily working at a different site (less than 24 months), the travel to that site can be claimable. PAYE employees with no fixed workplace can claim all work travel.
  • Detours for personal reasons aren't claimable. A 10-mile detour to the shops mid-business-trip means those 10 miles come off your business total.

What HMRC requires - also the same for both

Both groups need a contemporaneous mileage log. The records must include date, start, end, business purpose, and distance for each business journey, recorded at or near the time of the trip. HMRC explicitly does not accept estimates or reconstructions from memory.

This is where most people fail. If your records don't survive an enquiry, the relief gets disallowed retrospectively. For PAYE employees that means owing tax back; for self-employed it means a higher tax bill plus potential penalties.

How to track - app vs spreadsheet vs paper

The mechanics are the same regardless of your employment status: you need a per-trip record made in real time. The realistic options:

  • Pen and paper: works if you're disciplined enough to write it down on every trip. Most people aren't.
  • Spreadsheet filled in weekly: not contemporaneous, won't survive an HMRC enquiry. Don't.
  • Purpose-built mileage tracker app: background GPS records the trip automatically, you classify it with a tap, the per-trip log and tax-year totals are ready when you need them. The right answer for almost everyone.

What to look for in a tracker if you're UK-based

  • Built around HMRC's AMAP rates (45p/25p/24p) and the UK tax year (6 April)
  • Background GPS that captures the trip without you having to remember to start it
  • Per-trip classification (business or personal) with auto-classification options for power users
  • Export formats that work for both Self Assessment (SA103) and P87 / Mileage Allowance Relief
  • Offline-first - tunnels and rural blackspots don't lose data
  • Free for the basic tracking - paying to record your own miles makes no sense

MileClear works for both

MileClear is built for UK drivers regardless of employment status. Self-employed users get the SA103-ready PDF export; PAYE users get a Mileage Allowance Relief summary showing the gap between what their employer paid and what HMRC's AMAP would have been - the number that goes on the P87. The tracking itself is free forever; Pro (£4.99/mo) covers the export PDFs and a few extras.

Whichever side of PAYE you're on: install MileClear on the App Store.

The bottom line

Self-employed and PAYE employees both have legitimate, claimable tax relief on business mileage - through Self Assessment (AMAP) or P87 (MAR) respectively. The bar HMRC sets is the same for both: a contemporaneous, per-trip mileage log. Use a purpose-built tracker, capture every trip in real time, and the claim writes itself at tax-year end.