The Mileage Allowance is a tax-free allowance for self-employed people who use their vehicle for work. You can use it if you drive for business in a car, van, or bike.
How much you can claim depends on how much you travel for your sole trader business:
- for a car or van: 45p/mile, which goes down to 25p/mile for every mile after your first 10,000 miles
- for a motorbike: 24p/mile, regardless of distance
- for a bike: 20p/mile, also regardless of distance.
You can claim the Mileage Allowance through your annual Self Assessment tax return.