I’m a sole trader, what motor expenses can I claim?

If you’re self employed and use your own car for business travel you are able to claim expenses relating the miles you travel.

There are two ways to work out how much you can claim – simplified or actual cost.


As with use of home expenses, simplified is the simplest way to do this. This is where you can claim a flat rate based on the number miles you drive for business purposes – whether visiting clients, going to suppliers, heading to the bank. For the first 10,000 miles you can claim £0.45 and then £0.25 for every subsequent mile (2020/21 rates).

You need to make sure you keep records of the miles that you do for business – whether using a logbook in your car, a spreadsheet, or an app on your phone.

Actual cost

This is where you work out the actual cost of running vehicle and then work out the proportion of miles that you did for business purposes.

Again you’ll need to keep details of the miles you travel for business as well as a record of the mileage shown on your car at the beginning of the tax year and again at the end, so you can work out the proportion of the expenses to claim.

You can include the cost of fuel, MOT, servicing, insurance, breakdown cover.

A key thing to note is once you start using a method of claiming motor expenses, you need to use the same method until you change the car – you can’t pick and choose.

If you do change your car then it makes sense to keep records for both methods for the first year of ownership, so that you can work out which is most tax efficient.

Hire Cars

If you need to hire a vehicle solely for a business trip, then you can claim the full cost of the hire, and associated expenses – this is separate to expenses related to your own car.

The details of what and how much you can claim do change from time to time, so it’s best to check the latest guidance before claiming, or you know, ask a friendly professional……