Less than half of self-employed workers use simplified mileage rates

Google reviews
July 20, 2025
n

Less than half of self-employed workers, who use their vehicle for work purposes, are aware of HMRC’s simplified mileage rates, according to its own research. The flat rate deduction is 45p per mile for the first 10,000 miles and 25p for every mile after this. These can be used to claim for car usage that is solely related to work.

HMRC undertook the research to get a better understanding of travel expenses associated with the self-employed, and to find out why some people don’t use the simplified mileage rates, and whether they might use them in future. The survey of 1,000 people covered the self-employed or those who are partners in a business partnership.

It found that just 43% of self-employed people were aware of the simplified mileage rates, with car users (49%) more likely to know about them than van users (27%). Even sole traders (44%) were more aware than those in partnerships (31%). Where they had heard of them, most had been advised about them by their accountant or tax agent, with less than one in 10 hearing about them from another source.

Who is using the simplified mileage rates?

The widest adoption of these rates among those who had heard about them came from smaller organisations with a turnover of less than £20,000 (74%) or those with revenue of between £20,000 and £49,999 (64%). Larger businesses with higher revenues were less likely to use them, according to the research.

For those people who knew about them but were not using these rates, the most likely explanation was because they preferred to keep exact records (23%). Around 20% calculated they would be worse off if they used them, while 14% felt the rates were too low compared to the real cost of using their vehicle for work.

That said, vehicle users were more than twice as likely to agree (45%) than disagree (20%) that these rates would be sufficient to cover their vehicle expenses associated with their business. Yet more than a fifth said these rates didn’t cover their vehicle expenses.

Most people still rely on manual record keeping for their travel expenses, but those who use simplified mileage rates were considerably more likely to use a digital recording method, HMRC found.

Whichever way you deal with your travel expenses, you should speak to your accountant to ensure you are claiming everything you should for travel expenses, and other work expenses you may not realise you can claim for.

Let us help you

If you are a Sole Trader or Contractor and want help to make sure you are claiming your full allowance for any work-related travel, or any other business expenses, please get in touch with us and we will do what we can to maximise your tax relief.

Resources

Recent Articles

Parents of teenagers can extend Child Benefit claim online

Parents of teenagers can extend Child Benefit claim online

HMRC is reminding parents of 16 to 19-year-olds to extend their Child Benefit claim by August 31 to ensure their payments continue. Last year, 870,000 parents extended this benefit, with most confirming the extension online. You can use either the HMRC app if you have...

HMRC surveys suggest job perk changes are on the horizon

HMRC surveys suggest job perk changes are on the horizon

HMRC has published two new surveys which leading advisory firm BDO are concerned could result in the removal of valuable employment perks, such as salary sacrifice pension schemes and Benefit in Kind arrangements, during the Chancellor’s Autumn Statement. One survey,...

New Pension Schemes Bill to benefit 20 million workers

New Pension Schemes Bill to benefit 20 million workers

The Government’s new Pension Schemes Bill is expected to make it easier for millions of people to manage their pensions, by improving returns, and combining smaller pension pots to create bigger and better pension funds. The benefits of combining smaller pension pots...

Ready to join us?

Whether you’re a contractor, freelancer, or small business, Bright Ideas can help remove the burden of time-consuming and complex finances. We’ll draw on our years of knowledge and experience earned helping sole traders just like you.

When you choose us, you’ll be assigned a dedicated Account Manager who’ll provide one-on-one support that’s customised to your business. Communication is key, so we’ll always answer your questions or requests as soon as we can. In fact, we offer a same-day response guarantee for emails and calls received before 3pm.

Contact us to get started

Give us a call us or send an email today!

Looking to Switch Accountants?

Does your current accountant give 1-to-1 support? Are they fast and thorough?
Slap-dash services hold businesses back, so try our expert accountants instead. We make the transition simple, get in contact with us today and we’ll start the process.

Start the conversation

Let’s make your finances Brighter

Call us Monday to Friday 9am - 5pm

0161 669 4221

Request a call back