Self-Employed Mileage Deduction: The Complete 2026 Guide (UK, US & Canada)
If you're self-employed and use your vehicle for work, claiming a mileage deduction is one of the most effective ways to lower your taxable income. However, the rules, rates, and record-keeping requirements vary significantly depending on whether you're dealing with HMRC in the UK, the IRS in the US, or the CRA in Canada.
This guide breaks down everything you need to know to accurately track your miles and maximise your self-employed mileage deduction in 2026. We'll cover the official rates, what records you must keep, and how to stay compliant, no matter where you drive.
- UK Rate (2025/26) — 45p per mile for the first 10,000 business miles using HMRC's Simplified Expenses.
- US Rate (2026) — 72.5 cents per mile is the IRS standard mileage rate for business use.
- Canadian Rate (2026) — 73¢ per kilometre is the CRA automobile allowance rate for the first 5,000 km.
- Records are non-negotiable — All three tax authorities require detailed, timely mileage logs to approve your claim.
United Kingdom (HMRC)
For self-employed sole traders and partnerships in the UK, HMRC offers a straightforward way to claim vehicle costs called 'Simplified Expenses'. This uses a flat-rate mileage allowance that covers all running costs, including fuel, insurance, repairs, and depreciation.
HMRC Mileage Rates for 2025/2026
The rates are tiered for cars and vans, but flat for motorcycles and bicycles. These rates have been in place since 2011, and while there is parliamentary discussion about updating them due to increased motoring costs, these are the confirmed figures for the current tax year.
- Cars and Vans: 45p per mile for the first 10,000 business miles, and 25p per mile thereafter.
- Motorcycles: 24p per mile for all business miles.
- Bicycles: 20p per mile for all business miles.
You can also claim an additional 5p per mile per passenger for carrying fellow employees on a business journey in your car or van.
Claiming Methods: Simplified vs. Actual Costs
You have two choices: use the Simplified Expenses flat rates above or claim the actual costs of running your vehicle. If you claim actual costs, you'll need to calculate the business-use percentage of your total vehicle expenses, including fuel, insurance, servicing, and capital allowances.
Critically, you must choose one method per vehicle and stick with it. You cannot mix simplified and actual cost methods for the same vehicle within a single tax year.
Record-Keeping Requirements
HMRC requires a detailed log of your business journeys. Failing to provide this can result in your claim being rejected during an audit. Your mileage log must include:
- The date of each journey
- The start and end points of the journey
- The purpose of the trip (e.g., "Client meeting with Acme Ltd")
- The number of miles driven
Records must be kept for at least 5 years after the 31st January submission deadline of the relevant tax year.
United States (IRS)
In the US, self-employed individuals can deduct the costs of using their vehicle for business purposes. The IRS provides a standard mileage rate as a simplified alternative to tracking all your actual car expenses.
IRS Standard Mileage Rates for 2026
The IRS adjusts these rates periodically to reflect the changing costs of operating a vehicle. For the 2026 tax year (the return you file in 2027), the rates are:
- Business Use: 72.5 cents per mile.
- Medical or Moving: 20.5 cents per mile (for qualified active-duty members of the Armed Forces).
- Charitable Organisations: 14 cents per mile (this rate is set by statute and changes less frequently).
Claiming Methods: Standard Rate vs. Actual Expenses
You can either use the standard mileage rate or the Actual Expense Method. With actual expenses, you track all car-related costs (fuel, oil, repairs, insurance, depreciation, etc.) and deduct the portion that applies to your business use.
To maintain flexibility, you must use the standard mileage rate in the first year your car is available for business use. If you do this, you can then switch between the standard rate and actual expenses in later years.
Record-Keeping Requirements
The IRS is strict about record-keeping. Your mileage log must be timely—meaning you record trips at or near the time they happen, not months later. Each entry should include:
- The date of the trip
- Your starting point
- Your destination and the purpose of the trip
- The vehicle's starting and ending odometer readings
- The total miles driven
You must also record your vehicle's total odometer reading at the start and end of the year. Records should generally be kept for at least 3 years from the date you file your tax return.
Canada (CRA)
For self-employed individuals in Canada, the system for claiming vehicle expenses works differently. You generally deduct the business portion of your actual vehicle expenses, rather than using a flat rate per kilometre.
CRA Automobile Allowance Rates for 2026
The Canada Revenue Agency (CRA) sets annual automobile allowance rates. While these are primarily for employers to provide tax-free allowances to employees, they serve as a useful benchmark for what is considered a reasonable expense. The 2026 rates are:
- 73¢ per kilometre for the first 5,000 kilometres driven.
- 67¢ per kilometre for each additional kilometre.
- An additional 4¢ per kilometre applies for travel in the Northwest Territories, Yukon, and Nunavut.
Claiming Method: Actual Expenses
Self-employed Canadians must calculate their business-use percentage. You do this by dividing your business kilometres by your total kilometres driven in a fiscal period. You then apply this percentage to all your eligible vehicle expenses, which include:
- Fuel and oil
- Licence and registration fees
- Insurance
- Maintenance and repairs
- Leasing costs or capital cost allowance (depreciation)
- Interest on a car loan
Record-Keeping Requirements
A meticulous logbook is essential for a CRA claim. For each vehicle, you must record:
- The odometer reading at the start and end of the fiscal period.
- For each business trip: the date, destination, purpose, and kilometres driven.
The CRA requires you to keep all receipts and records for six years. To simplify things, the CRA allows you to keep a full logbook for one year to establish a baseline. In subsequent years, you can use a three-month sample logbook, provided your business use stays within 10% of the baseline year.
At-a-Glance Comparison: UK vs. US vs. Canada
| Feature | UK (HMRC) | US (IRS) | Canada (CRA) |
|---|---|---|---|
| Main Business Rate (2026) | 45p/mile (first 10k) | 72.5 cents/mile | Deduct % of actual costs |
| Claiming Method | Simplified rate or actual costs | Standard rate or actual costs | Business-use % of actual costs |
| Logbook Must Include | Date, purpose, route, miles | Date, purpose, destination, miles | Date, purpose, destination, km |
| Odometer Readings | Not explicitly required | Start & end of year | Start & end of fiscal period |
| Record Retention | 5 years after tax deadline | 3 years from filing date | 6 years from end of tax year |
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