The right comparison starts with your vehicle, its previous tax claims and a reliable business-mileage total. It is not simply a choice between whichever figures look largest this April.
Simplified mileage: rates and eligibility
For eligible cars and goods vehicles, HMRC’s 2026/27 simplified mileage rates are 55p for the first 10,000 business miles and 25p thereafter. The first band was 45p before 6 April 2026; motorcycles use 24p. Check the relevant tax year, especially if your accounting period differs from the tax year.
Commercially designed vehicles such as black cabs and hackney carriages are excluded from this car mileage scheme. You cannot use it for a vehicle already subject to a capital-allowance claim or deducted as an expense. Once you use flat rates for a vehicle, you must continue while it remains in the business.
What the mileage amount already covers
The flat amount replaces buying and running costs such as fuel, insurance, repairs and servicing. Do not add those bills again. Separately allowable business parking and other travel expenses need their own evidence. Identify private journeys rather than assuming every mile recorded by a phone is business travel.
Actual costs: separate running costs from the vehicle
Keep fuel or charging, insurance, maintenance, hire or finance paperwork, and evidence of private use. The deductible business share of running costs is only part of the calculation. A car purchase is normally considered under capital-allowance rules; accounting depreciation and the whole finance repayment are not automatically tax deductions.
Use the rental, lease, hire-purchase and loan comparison to check the contract before treating a monthly payment as an expense. It separates capital, interest and hire charges and explains the cash-basis distinction for the car-hire restriction.
A transparent comparison
Illustration only: 12,000 qualifying car miles in 2026/27 produce £6,000 using the flat rates: £5,500 plus £500. If actual running costs are £7,000 and the evidenced business share is 80%, the running-cost element is £5,600. That is not the final actual-cost comparison: eligible capital allowances or finance treatment still need checking. A £6,000 deduction is not a £6,000 tax refund.
Before you choose
- Check the previous return and purchase or lease agreement.
- Separate passenger, pickup, repositioning and private travel in the log.
- Check home-to-work travel on its facts; leaving an app online is not a tax test.
- Compare likely use over the vehicle’s working life, not an invented annual saving.
Use mileage tracking support to build a defensible log, then review other allowable expenses. The free tracker helps organise records; it does not decide whether a journey qualifies.
The comparison is only useful if the mileage total is defensible. Check which journeys count as business mileage before using pickup, repositioning or home-travel figures.
Sources checked 8 October 2026: Mileage · Expenses · Car.
Practical next steps
What Counts as a Business Mile for a Private Hire Driver?
Distinguish working journeys from private travel and keep evidence beyond the miles shown with a passenger on board.
How to Track Expenses as an Uber Driver
A weekly routine for receipts, platform fees, mileage and bank reconciliation that avoids duplicate claims.
Renting, Leasing or Financing an Uber Car: Tax Records and Costs
Identify your car agreement, separate repayments from running costs and gather the documents for your tax claim. Includes a contract comparison and worked examples.
Selling or Replacing Your Uber Car: Tax Records to Keep
The tax effect of selling a private hire car depends on how you claimed for it. Includes a vehicle handover file, separate scenarios for each earlier claim and a fictional balancing charge example.
General guidance using the sources linked above. Check the publication context and your own circumstances before making a tax decision.
Start with the free tracker