From 6 April 2026, the flat rate you can claim for business miles in a car or van rose from 45p to 55p for the first 10,000 miles, with 25p a mile after that. It is the first increase since 2011, confirmed by HMRC and covered by the ICAEW. For a sole trader doing 8,000 business miles a year, that is a £4,400 deduction instead of £3,600, or £800 more off your taxable profit for exactly the same driving.

One thing to get right immediately: the new rate applies to the 2026/27 tax year, the one you are in now. The return most sole traders will file this winter covers 2025/26, and for that year the old 45p rate still applies. Claim 55p on the wrong year and you will overstate your expenses.

What the flat rate covers

The mileage rate, HMRC calls it simplified expenses, replaces the actual costs of buying and running the vehicle. One number covers fuel, insurance, servicing, repairs, MOT and the wear on the van itself. You cannot claim any of those separately on top.

You can still claim, in addition to the mileage:

What counts as a business mile is travel for work, to jobs, to the merchant, to look at a quote. The commute-equivalent, home to a single fixed workplace, does not, but for a gardener or tradesperson working at customers' properties, most driving is business driving.

The rule that catches people: you cannot chop and change

HMRC's condition is that once you use the flat rate for a vehicle, you must carry on using it for as long as you use that vehicle for the business. You choose per vehicle, once. Swap to a new van and you get a fresh choice.

So the decision is worth five minutes of arithmetic, not a guess.

Flat rate or actual costs: the quick comparison

The flat rate usually wins when the van is modest, reliable and does a lot of miles. Actual costs usually win when the van is expensive, new, or does few miles, because then the real spend per mile is high and you can also claim capital allowances on the purchase.

Run the comparison once, honestly:

At 12,000 business miles, the flat rate gives £6,000 (10,000 × 55p plus 2,000 × 25p). If your van's true running costs are less than that, the flat rate is both more money and less paperwork. If you are driving a £40,000 van 4,000 miles a year, do the actual-costs sum before you commit, because the flat-rate choice is sticky.

A side note while you are in this part of your return: if you have heard of the £1,000 trading allowance, it is almost never the right choice for anyone with a van. Claiming it means claiming no other expenses at all, and your van alone costs more than £1,000 a year to run.

The whole method rests on the mileage log

Whichever method you pick, the number HMRC cares about is business miles, and the number most sole traders cannot produce is business miles. A year of driving reconstructed in January from diary entries and fuel receipts is guesswork, and it is always guesswork in HMRC's favour, because you forget trips, never invent them.

The fix is the same as for every other record: capture it when it happens. A note per job, a weekly odometer reading, or software that logs it from your diary. Ten seconds at the time replaces an evening of archaeology at the year end.

This matters more from here on. Making Tax Digital reaches sole traders earning over £30,000 in April 2027, which means quarterly updates from digital records rather than one annual reconstruction. A mileage habit you start now is one less thing to change when that arrives. Keeping the whole picture in one place, jobs, invoices, and the records behind them, is exactly what 1pc is for.

The short version