In this blog post, we cover;
In this blog post, we cover;
If you use your own car for business, the chances are you are either not claiming everything you are entitled to, not keeping the records HMRC expects, or both. It is one of the most common gaps we see. Tracking mileage accurately just tends to fall by the wayside when you are busy running a business.
The rules around mileage claims are straightforward enough, but the recording of them is where things often go wrong. This blog will explain what HMRC requires, what you can and cannot claim, and how Dext Mileage makes the whole thing considerably less painful.
What HMRC Expects When You Claim Mileage
Whether you are a sole trader or a limited company director, if you want to claim tax relief on business mileage you need to back it up. HMRC requires a mileage log that records:
- The date of each journey
- The start and end location
- The purpose of the trip, who you were visiting or what the journey was for
- The number of miles travelled
A rough figure at the end of the year will not stand up to scrutiny. HMRC can (and does) challenge mileage claims where there is no contemporaneous record, meaning one made at the time of the journey, not reconstructed months later.
It is also worth knowing that commuting, your regular journey from home to a fixed place of work, does not count as business mileage. Only journeys made wholly and exclusively for business purposes are allowable. Think of it this way, as an employee, you wouldn’t expect your employer to pay for your daily commute to the office.
The Approved Mileage Rates and What They Cover
HMRC sets Approved Mileage Allowance Payment (AMAP) rates, which determine how much you can claim per mile without needing to justify the actual running costs of the vehicle. For the 2025/26 tax year, the rates are:
Cars and vans are 55p per mile for the first 10,000 business miles in the tax year, then 25p per mile for every mile above 10,000.
Motorcycles 24p per mile regardless of distance.
Bicycles 20p per mile regardless of distance.
These rates are designed to cover fuel, servicing, insurance and general wear and tear. You cannot claim the AMAP rate and then also claim for fuel or running costs on top, it is one or the other.
Sole Trader or Limited Company Director: Does It Work Differently?
The HMRC-approved rates apply in both cases, but the mechanics are slightly different.
Sole Traders
If you are self-employed and use your personal vehicle for business, you claim mileage as an allowable expense on your Self Assessment tax return. You multiply your business miles by the approved rate and deduct that amount from your taxable income. Simple in theory, provided you have the records to support it and with Making Tax Digital for Income Tax (MTD IT) hitting self employed individuals and landlords, it’s wise to keep on top of these records regularly.
Limited Company Directors
If you use your personal vehicle for company business, the company reimburses you at the approved mileage rate. That reimbursement is not a taxable benefit, provided it does not exceed the HMRC rate. The company also gets corporation tax relief on the amount reimbursed, making it a tax-efficient way to cover business travel costs.
If the company pays you less than the approved rate, you can claim Mileage Allowance Relief (MAR) on the shortfall through your Self Assessment return.
Why Most People Get This Wrong
The approved rates are generous and the relief is real, but only if the records are there. The most common problems we see are:
Journeys recorded in bulk at the end of the month or year, often from memory. These are difficult to rely on and easy for HMRC to challenge.
No record of the journey purpose, which means HMRC cannot verify it was genuinely for business.
Mixing business and personal journeys without a clear distinction between the two.
Reimbursing the full amount shown on the fuel receipt, again without verifying what is personal and business travel.
Simply not bothering, and therefore leaving a legitimate tax relief entirely unclaimed.
None of these are catastrophic on their own, but together they add up to a meaningful amount of money left on the table or, in a worst-case scenario, a mileage claim that cannot be substantiated if HMRC asks questions.
Where Dext Mileage Comes In
Dext Mileage is a mobile app designed to do exactly what most people find tedious: track business journeys accurately, automatically and in a format that satisfies HMRC’s record-keeping requirements.
Rather than relying on memory or a spreadsheet you update once a month, the app uses your phone’s GPS to track journeys as they happen. You classify each trip as business or personal, add a brief purpose note, and the app handles the rest; calculating the mileage, applying the correct HMRC rate and building a running log of every journey.
At the end of the month or tax year, you have a complete, accurate mileage record ready to share with your accountant or submit to HMRC. No reconstruction, no guesswork, no gaps.
What Dext Mileage Does In Practice
✓ Stores your vehicle information including engine size and fuel type for accurate recording.
✓ Automatic journey detection, the app can detect when you are travelling and prompt you to log the trip, so nothing is missed.
✓ GPS-verified distances, each journey is recorded with a mapped route, removing any uncertainty about the mileage claimed.
✓ Business or personal classification, you decide how each journey is categorised, keeping your records clean.
✓ HMRC-rate calculations, the app applies the correct rate automatically, including the 10,000-mile threshold.
✓ Exportable reports, your mileage log can be exported and shared directly with your accountant, or uploaded to your accounting software
✓ Integration with Dext, if you already use Dext for receipt capture and expense management, mileage sits within the same platform.
Is Dext Mileage Right for You?
It is particularly well suited to anyone who regularly travels for work but finds mileage recording inconsistent. That includes:
Sole traders who visit clients, sites or suppliers regularly
Limited company directors who use a personal vehicle for business and want to reclaim efficiently.
Tradespeople, consultants and anyone whose work involves frequent travel between different locations.
Anyone who has previously lost track of their mileage and wants a more reliable system going forward.
Existing Dext users not yet using the Mileage feature as it’s already included within the subscription.
If you only do the occasional business journey, a simple spreadsheet may be sufficient. But if mileage is a regular part of your working week, having it tracked automatically is likely to save you time, reduce errors and ensure you are claiming what you are genuinely entitled to.
Frequently Asked Questions
If the car is owned or leased by the company rather than by you personally, the AMAP mileage rate does not apply, the company would instead claim the actual running costs and fuel directly. The AMAP rate is specifically for journeys made in a personally owned vehicle. If you are unsure which arrangement applies to you, it is worth checking with your accountant.
If your employer or company reimburses you above the approved HMRC rate, the excess is treated as a taxable benefit and must be reported accordingly. Staying at or below the approved rate keeps the reimbursement free of tax and National Insurance.
Yes. Mileage is one of the areas HMRC may look at closely during a compliance check or enquiry, particularly if the amounts claimed seem high relative to the nature of the business. Having a GPS-verified, contemporaneous record from an app like Dext Mileage is a much stronger position to be in than a manually reconstructed spreadsheet.
Yes. If you are already a Dext user or you are thinking about getting started, we can help you set things up and make sure it is connected correctly to your accounts. Just get in touch to discuss the process in more detail.
Final Thoughts
Mileage is one of those reliefs that is genuinely worth claiming, but only works if the records back it up. Getting into the habit of logging journeys as you go, rather than trying to piece them together later, is one of the simplest changes you can make to your record-keeping.
Dext Mileage makes that habit easy to keep. If you have been meaning to sort your mileage recording out, or you are not sure whether you have been claiming everything you should, we are happy to take a look with you.
The team at Right Click Accounting are happy to walk you through it and make sure you are claiming every mile you are entitled to, simply get in touch with up today!