Travel & mileage expenses explained

Running a small business inevitably generates office‑related costs. HMRC allows you to deduct day‑to‑day running costs, but only when they are solely for business use.

Travel costs can be a significant part of running a business. HMRC permits deductions for business journeys, but private trips and commuting are excluded.

Limited company directors - owning a vehicle through the business

  • Operating costs: Insurance, repairs, servicing, fuel, parking, vehicle tax and breakdown cover can all be claimed. The same applies to hire charges and lease payments that relate solely to business use.

    Mileage rates: Mileage allowance pays 45p per mile for the first 10,000 miles in a tax year and 25p thereafter for cars; 24p per mile for motorcycles and 20p for bicycles.

  • Vehicle purchase: If you buy a vehicle through the business you can claim the full cost of the vehicle in the year of purchase, known as a capital allowance.

  • Other travel costs: Train, bus, tram, taxi, air fares, hotel rooms and meals on overnight business trips are deductible. Accommodation and food must be reasonable and relate only to the business portion of the trip. Accommodation expenses are only allowable for the business‑only portion of your trip.

What you can’t Claim

  • The cost of commuting between home and your regular workplace is not allowable.

  • Fines and penalty charges, even if incurred on a business trip, are never tax‑deductible.

  • You cannot claim for any element of private travel; if a trip mixes business and pleasure you must apportion the costs accordingly.

Tax tips

  • Choose zero‑emission or low‑emission cars to purchase a vehicle through the business

  • Time your purchase wisely; claiming 100% tax relief on the cost of the car is allowable currently till March 2026.

  • Keep meticulous records of costs and emissions to support your claim

Sole traders and self employed - allowable travel expenses