Quick answer
Simplified expenses let sole traders claim flat rates instead of tracking actual costs: 45p a mile for the first 10,000 business miles and 25p after, set monthly amounts for working from home, and fixed deductions for living at business premises.
Updated October 2026 · Figures based on 2025/26 rates
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Vehicle mileage
Cars and vans: 45p per mile for the first 10,000 miles each tax year and 25p after that. Motorcycles are 24p a mile. You cannot also claim fuel or running costs for the same vehicle.
Working from home
Flat rates depend on hours worked: £10 a month for 25 to 50 hours, £18 for 51 to 100 hours and £26 for 101 hours or more.
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Living at your business premises
Fixed monthly deductions apply for private use of premises such as a guesthouse, based on how many people live there.
When actual costs are better
Compare both methods. High-value or fuel-efficient vehicles may suit actual costs, and a large share of home bills may beat flat rates.
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Frequently asked questions
Can I switch methods?
You choose each tax year, but you generally stay with the same method for a vehicle once chosen.
Do I still need records?
Yes. Keep a mileage log and hours worked to support the figures.
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