Sole Trader Mileage Claims (UK)

Who is a sole trader for HMRC purposes

A sole trader is an unincorporated self-employed individual. You and your business are legally the same entity. You report income and expenses on your annual Self Assessment tax return (form SA100 plus the SA103 supplementary self-employment pages).

Common UK sole trader situations: freelance consultants, plumbers and trades, mobile hairdressers, taxi drivers (private hire and hackney), driving instructors, courier and delivery drivers (where genuinely self-employed and not workers), photographers, IT contractors operating outside IR35.

Two methods for claiming mileage

AMAP (the "simplified expenses" method): claim 45p per business mile for the first 10,000 miles, 25p after. Plus 24p for motorcycles, 20p for bicycles. <a href="/glossary/amap">More on AMAP rates.</a> No need to track actual expenses; just track business miles.

Actual expenses: total your year's vehicle costs (fuel, insurance, road tax, repairs, MOT, lease payments or depreciation) and multiply by your business-use percentage. Higher recordkeeping bar; can produce a larger deduction for high-cost vehicles or high business-use percentages.

First-year choice and lock-in

In the first year you put a vehicle into business use as a sole trader, you choose AMAP or actual expenses. If you choose AMAP, you can stay on AMAP or switch to actual in a later year (with one caveat: actual must use the same business-use percentage methodology going forward).

If you choose actual expenses in year one, you generally cannot switch to AMAP for that vehicle's life. The HMRC rule is more flexible than the equivalent IRS rule but the practical advice is the same: in year one, run the math both ways before deciding.

When AMAP wins

Lower-cost vehicles, lower business-use percentages, or simpler administrative needs. AMAP is fast, predictable, and produces a defensible HMRC claim with minimal documentation beyond a mileage log.

Vehicles owned for several years where most depreciation is already past also tend to favour AMAP over actual.

When actual expenses wins

Newer, higher-cost vehicles in the first 1-3 years of ownership. Depreciation under capital allowances can produce a larger deduction than AMAP, especially when combined with high business-use percentages.

High-fuel-cost driving (long-distance commercial use) where AMAP under-covers the actual fuel spend.

Vehicles with high insurance and maintenance costs that AMAP does not fully reflect.

How to claim through Self Assessment

Mileage claims go on the SA103 self-employment pages of your Self Assessment return. AMAP claims enter as a single mileage figure multiplied by the rate (the form asks you to choose the simplified expenses method). Actual expense claims itemize each cost category.

Tax year for UK Self Assessment is 6 April to 5 April. Self Assessment is due by 31 January following the end of the tax year (online); paper returns are due 31 October.

Documentation requirements

Whichever method you use, a contemporaneous mileage log is required. Date, destination, business purpose, miles for every business trip. <a href="/uk/log-requirements">Full UK log requirements.</a>

Actual expenses also require all receipts: fuel, insurance, road tax, repairs, MOT, parking, tolls, and any lease or finance documents. HMRC may request to see them.