If you work as a self-employed delivery driver, you have probably heard other drivers talk about “claiming 45p a mile”. It sounds simple, but lots of people get confused about what it really means. Is it money someone pays you? Does it cover fuel? Can everyone use it?
This guide explains the 45p per mile rate in plain English, including an important change that started in April 2026.
What Is the 45p Per Mile Rate?
The 45p per mile rate is part of something HMRC calls simplified expenses. It is a flat rate that self-employed people can use to work out the cost of using their own vehicle for work.
Instead of adding up every receipt for fuel, insurance, repairs, servicing and so on, you simply count your business miles and multiply them by a set amount. That total is then counted as a business cost on your tax return.
The key thing to understand is this: nobody pays you 45p per mile. It is not extra money in your pocket. It is a number you take away from your earnings so that you pay less tax.
The Rate Has Gone Up: 45p Is Now 55p
Here is the part many drivers have missed. From 6 April 2026, the flat rate for cars and vans went up from 45p to 55p for the first 10,000 business miles.
| Vehicle type | Rate before 6 April 2026 | Rate from 6 April 2026 (2026 to 2027 tax year) |
|---|---|---|
| Cars and vans: first 10,000 business miles | 45p | 55p |
| Cars and vans: every mile after 10,000 | 25p | 25p |
| Motorcycles: all business miles | 24p | 24p |
So which rate should you use? It depends on when you drove the miles:
- Miles driven between 6 April 2025 and 5 April 2026 use the old rate of 45p. These go on the tax return you need to send by 31 January 2027.
- Miles driven from 6 April 2026 onwards use the new rate of 55p. These go on next year’s tax return.
You can check the latest figures on the official GOV.UK page about simplified expenses for vehicles.
How the Flat Rate Works in Real Life
Let’s look at two simple examples using the 45p rate for the 2025 to 2026 tax year.
Example 1: You drove 8,000 business miles. 8,000 x 45p = £3,600 in vehicle costs.
Example 2: You drove 12,000 business miles. The first 10,000 miles: 10,000 x 45p = £4,500 The next 2,000 miles: 2,000 x 25p = £500 Total = £5,000 in vehicle costs.
Now, what does that actually save you? You only pay tax on your profit, which is what you earned minus your business costs. If you pay income tax at the basic rate of 20%, a £4,500 claim could cut your income tax by around £900. You may also pay a little less National Insurance. That is why keeping track of your miles really matters.
What Does the Flat Rate Cover?
The flat rate is meant to cover the full cost of buying and running your vehicle. That includes things like:
- Fuel
- Insurance
- Repairs and servicing
- Tyres
- MOT and road tax
Because the flat rate already covers these, you cannot claim them on top. If you use 45p (or 55p) per mile, you cannot also claim your fuel receipts for the same vehicle.
There are a few costs you can still claim separately, such as parking charges, as well as other work costs that have nothing to do with the vehicle, like your work phone.
Who Can Use It?
You can use the flat rate if you are a sole trader (self-employed on your own) and you use a car, van or motorcycle for work. Most self-employed multi-drop and courier drivers fit into this group.
There are some rules to know about:
- You must stick with it. Once you use the flat rate for a vehicle, you have to keep using it for as long as you use that vehicle for work.
- You cannot switch after claiming the cost of the van. If you have already claimed the cost of buying the vehicle (known as capital allowances), you cannot use the flat rate for it.
- Only business miles count. Driving to the shops or visiting family on your day off does not count. If you are not sure where the line is, our guide on what counts as business mileage explains it step by step.
Flat Rate or Actual Costs: Which Is Better?
You do not have to use the flat rate. You can add up your real costs instead. The right choice depends on your vehicle and how much it costs to run.
If you rent a van, your costs can be quite high. According to our guide on van rental costs for multi drop work, weekly rental usually sits between £200 and £350, and that is before you pay for fuel. When your running costs are this high, adding up your actual costs may give you a bigger claim than the flat rate.
On the other hand, if you own a cheap, reliable van that costs little to run, the flat rate might work out better. It is also much less work, as you only need to track your miles.
| Flat rate (per mile) | Actual costs | |
|---|---|---|
| What you track | Business miles only | Miles, receipts and bills |
| How much paperwork | Low | Higher |
| Can you claim fuel separately? | No | Yes |
| Best for | Low running costs, simple records | High running costs, such as van rental |
HMRC has a free simplified expenses checker you can use to compare both options before you decide.
How to Keep a Good Mileage Record
Whichever option you choose, HMRC can ask to see proof. A good mileage record should show:
- The date of each trip
- Where you started and finished
- How many miles you drove
- Why the trip was for work
You can use a notebook, a spreadsheet or a mileage tracking app. The most important thing is to do it as you go, not months later when you have forgotten. If you are new to all this, our simple guide to tax and Self Assessment for delivery drivers walks you through registering with HMRC and filling in your return.
If your tax affairs feel complicated, it is always worth speaking to an accountant.
Start Driving With Skilled Solutions
Understanding your expenses is a big part of being self-employed, and it helps you keep more of what you earn. At Skilled Solutions, we connect drivers with trusted partners like Amazon Logistics and DPD across Essex, Kent, London and West Sussex, and we can help you find a rental van to get started.
Ready to get on the road? Take a look at our current driver vacancies and apply today.
