Self-employed mileage and travel expenses guide for freelancers

If you’re freelancing or a sole trader, chances are you’re clocking up plenty of miles and other travel costs that eat into your profits. However, it’s not all bad news. You can claim back some of your self-employed mileage costs and travel expenses.

A petrol station at night
Photo by Juan Fernandez on Unsplash

What expenses am I entitled to?

The types of expenses you can claim come under two categories: your self-employed mileage and your travel costs.

Understanding what you’re entitled to is an area that freelances have often found confusing. To make things clearer, the government has published the mileage rates freelance workers can claim back. The amount you’re entitled to varies depending on whether you drive a car, van or motorcycle, but they are all claimed back the same way.

However, travel expenses aren’t just limited to self-employed mileage. If you have costs from:

  • fuel and car parking
  • congestion charges
  • travel fares
  • or a business-related overnight stay, you’re entitled to part of that money back. 

In addition, some self-employed workers can claim back food and drink if they’re on the road frequently or if it’s a business trip. 

And it doesn’t stop there. Freelancers can also claim back part of the costs for:

  • Car insurance/breakdown cover
  • Vehicle hire
  • And other ongoing vehicle expenses

However, the above only applies if the costs are incurred as part of doing business. And, unfortunately, the daily commute to work doesn’t count.

A bus at Piccadilly Circus
You can claim for bus and other travel fares

What self-employed mileage rates apply?

That’s the travel costs covered. Now let’s discuss the claimable mileage rates as set out in the government’s Approved Mileage Allowance Payments (AMAP) scheme. The rates will vary depending on the type of vehicle you are driving. The way it works is this: as a car driver, you’re entitled to 45p for the first 10,000 miles for each mile you travel in any tax year. After that, it’s 25p per mile.
For other rates, see our chart below.

Figures for 2019First 10,000 miles Over 10,000 miles 
Car and Vans45p25p
Motorcycles24p24p
Bicycles 20p20p

Note: the figures are correct at the time of writing. However, the amount of mileage you’re entitled to can be subject to change. For the latest updates, visit the Gov.UK

Sole trader vs Ltd company

When it comes to expenses, there are some differences between what sole traders and Ltd companies can claim for. Likewise, there are a few distinctions in declaring income etc. For instance, Ltd companies are obliged to have annual accounts, while sole traders aren’t. However, mileage rates are the same for sole traders and limited companies. 

As a worker for a limited company, you can claim back the mileage expenses if the travel Is for business purposes and you use your own vehicle.  

The rules are slightly different if the car is owned by the business. In this case, you’re only entitled to claim back the cost of fuel. If you use your own car for work and your employer doesn’t pay the full amount, you can claim back the rest from the government.

Allowable business expenses, which were highlighted earlier in the article, are the same for a LTD company as they are for a sole trader.

Conclusion

It appears complicated on the face of it, but self-employed mileage and travel expenses don’t have to be a challenge. Once you understand what you can claim for, what the rates are and how to claim it’s not such a minefield. 

However, if you have specific questions over self-employed mileage and travel expense claims, it’s best to seek expert advice.