Mileage Allowance 2026: A Leeds Night Driver's Guide to 55p vs Actual Costs
The mileage allowance 2026/27 for self-employed drivers is 55p a mile for the first 10,000 business miles and 25p a mile after that. Night drivers in Leeds often clock up enough miles for the flat rate to win, but a newer car can tip the sum the other way.
Published 19 September 2026 · Updated 19 September 2026
The mileage allowance 2026/27 is 55p a mile for the first 10,000 business miles and 25p a mile after that, for self-employed drivers using simplified expenses. Leeds night drivers often cover far more than 10,000 miles a year, so the flat rate deserves a serious look, but it does not always beat claiming your real costs.
This guide sets out the HMRC mileage rates 2026/27 with the GOV.UK source for each figure. It then compares mileage against actual costs with worked numbers, and covers the Leeds City Council licensing costs and renewal terms that sit alongside the car. Use our mileage calculator to test your own miles as you read.
Key takeaways
- The mileage rate 2026 for self-employed car and van drivers is 55p a mile up to 10,000 business miles, then 25p a mile.
- Flat rate or actual costs is a choice you make per vehicle. Once you use the flat rate on a car, you keep using it on that car.
- High mileage in an older, cheap-to-run car usually favours the flat rate. A newly bought car with capital allowances can favour actual costs.
- You cannot claim the flat rate and also claim fuel, insurance or repairs on the same vehicle. Parking and tolls can still be added.
- Leeds licence fees, DBS and medical costs are separate business expenses. A good mileage log supports whichever method you pick.
What is the mileage allowance for self-employed drivers?
The mileage allowance is a flat rate per business mile that a self-employed driver can deduct from profits instead of tracking real vehicle costs. For 2026/27 it is 55p a mile for the first 10,000 miles and 25p after that. It is part of HMRC's simplified expenses scheme.
What are the HMRC mileage rates for 2026/27?
According to HMRC's guidance on simplified expenses for vehicles, the 2026/27 rates for cars and goods vehicles are 55p a mile for the first 10,000 business miles and 25p a mile after that. Motorcycles are 24p a mile. The tax year runs from 6 April 2026 to 5 April 2027.
| Vehicle | First 10,000 business miles | Each mile after 10,000 |
|---|---|---|
| Car or van | 55p | 25p |
| Motorcycle | 24p | 24p |
The mileage allowance 2026 figure of 55p is higher than the 45p that applied for many years. If you are comparing older guides, check the date carefully. Any article quoting 45p for the first band is out of date for 2026/27. The 25p rate beyond 10,000 miles did not change.
GOV.UK also says you can claim other travel costs, such as parking and train fares, on top of the flat rate. Fines are never allowable. Those extras are what your mileage log and receipts should show separately.
What does the flat rate actually cover?
The flat rate stands in for the running and ownership costs of the car: fuel, insurance, servicing, repairs, road tax and the loss in the car's value. That is why you cannot add those costs again. It only covers business miles, so private journeys are left out of the claim.
You do not need to keep fuel receipts to claim the flat rate. You do need to be able to show how many business miles you drove. That is the number HMRC will ask about if it opens an enquiry.
Who can use simplified mileage, and who cannot?
Sole traders, and partnerships with no company as a partner, can use simplified mileage. Limited companies cannot. You also cannot use it on a car if you have already claimed capital allowances for that car or put its costs into your accounts as an expense.
GOV.UK's simplified expenses overview confirms these limits and explains that you do not have to use the scheme at all. Cars designed for commercial use, such as black cabs, are excluded from the vehicle flat rate. A standard saloon or hybrid used for private hire is not in that group.
If you run your driving through a company, the picture is different. Our guide to the mileage allowance for a limited company driver covers that route.
What are the Leeds licensing rules a night driver should know?
Leeds City Council licenses private hire drivers and vehicles in the city. According to its licensing policy, applicants need an enhanced DBS check, a Group 2 medical, a local knowledge test and an English test at Entry Level 3. Driver licences start at 12 months and then run for up to three years.
Those details come from the council's taxi and private hire licensing policy and procedures. Vehicle licences run for a maximum of 12 months, so the car has its own renewal cycle. The policy also says applicants must subscribe to the DBS Online Update Service.
The medical schedule depends on age. The policy sets one medical at application for drivers under 45, then one every five years from 45 to 65, and yearly after 65. Treat these as the rules at the time we checked and confirm your own dates with Leeds City Council.
What do Leeds licences cost, and are they allowable?
Leeds City Council publishes its own fee list, and the figures can change. When we checked its private hire fees page, a driver renewal was £150 for one year or £390 for three years, and a vehicle renewal was £135. Check the page for the current figures.
The same page lists a new driver application at £120 plus a £30 admin fee and a £70 DBS check, along with separate training and test fees. Vehicle applications had an application fee and an inspection fee. Sticker costs varied by type.
For a self-employed driver, these are ordinary business costs of holding the licence you need to trade. They go in your expenses alongside insurance and vehicle tests. They are separate from the mileage rate, because the flat rate only covers running the car. Keep every receipt with your records.
| Item | Amount shown | Treated as |
|---|---|---|
| Driver renewal, one year | £150 | Allowable business expense |
| Driver renewal, three years | £390 | Allowable business expense |
| Vehicle renewal | £135 | Allowable business expense |
| New driver application | £120 plus £30 admin | Allowable business expense |
| Enhanced DBS check | £70 | Allowable business expense |
| Mileage rate (not a fee) | 55p then 25p a mile | Covers running costs, not licences |
Does Leeds have a Clean Air Zone charge for private hire cars?
No. Leeds City Council planned a charging Clean Air Zone but concluded in October 2020 that it was no longer needed. Its news release said the aims were achieved without charging a single vehicle. Check the council site for any newer scheme before assuming a charge applies.
The council's Clean Air Zone review announcement said nearly half of Leeds licensed taxis and private hire vehicles were already hybrid or electric. That matters for your tax, because a cleaner car changes the capital allowance rate. It affects the mileage-versus-actual-costs choice.
Why do night drivers in Leeds often do well on the flat rate?
Night work tends to produce many miles for each pound of fares, because you drive between jobs and cover long trips home from the city centre. The flat rate pays a set amount per mile, so a high-mileage year builds a large claim without tracking each running cost. It suits older, paid-for cars best.
The first 10,000 miles earn 55p each, which is £5,500 before the rate drops. Miles after that earn 25p. The band means the second half of a very busy year is worth less per mile, so the flat rate loses ground as mileage climbs. Actual costs do not have that step.
Mileage vs actual costs: how does the comparison work?
Mileage versus actual costs is a comparison of two totals for the same year. The flat rate total is your business miles multiplied by the rates. The actual cost total is your business-use share of running costs plus any capital allowances on the car. You claim whichever suits you.
| Point | Simplified mileage rate | Actual costs |
|---|---|---|
| What you claim | Business miles times 55p (first 10,000) and 25p after | Business share of fuel, insurance, servicing, repairs and road tax, plus capital allowances |
| Records needed | A mileage log | A mileage log plus every receipt and the purchase price |
| Capital allowances | Not claimed on that car | Claimed on the car, at a rate that depends on emissions |
| Effort | Low | High |
| Best for | Older, cheap-to-run cars with high mileage | Newly bought or costly cars, and electric cars |
| Switching later | You must keep the flat rate for that vehicle | You may change on a different vehicle |
GOV.UK's guidance on self-employed vehicle expenses says that where you use something for both business and personal reasons, you can only claim the business share. That is why a mileage log matters even when you claim actual costs.
How do capital allowances change the sum?
GOV.UK's page on capital allowances for business cars says that for cars bought from April 2021, electric or zero-emission cars get a 100% first-year allowance. Cars emitting 50g/km or less get the main rate of 14% a year, and cars above that get the special rate of 6%.
The same page says you may use simplified mileage instead of capital allowances, but never both on the same car. It also says cars cannot use the annual investment allowance. For a driver buying a new or nearly new car, this is the number that can swing the comparison.
What if I have already claimed capital allowances?
If you have already claimed capital allowances on the car, or put its costs into your accounts, you cannot switch that car to the flat rate. GOV.UK sets this out on the simplified vehicle page. That makes your first-year choice on a new car a decision you should take carefully.
Worked example: which method wins?
This is an illustrative example with two invented drivers. All costs are made up for the sums and are not benchmarks. Both drive private hire cars at night in Leeds for one full tax year. We ignore other income and expenses, and we compare only the vehicle deduction.
Driver A: Amir, newly bought hybrid, 22,000 business miles
Amir bought a hybrid for £14,000 in the year. He drove 24,000 miles in total, of which 22,000 were business, so his business share is 22 divided by 24, about 91.7%. Assume the car falls in the main 14% capital allowance rate, which is a simplifying assumption for the illustration.
Flat rate: 10,000 miles at 55p is £5,500. The other 12,000 miles at 25p is £3,000. The total is £8,500.
Actual costs: assume fuel £3,900, insurance £2,400, servicing and tyres £1,300, road tax £190, MOT £55, cleaning £250 and breakdown cover £120. That is £8,215 in running costs. Multiplied by 91.7% this is £7,530. A 14% allowance on £14,000 is £1,960, or £1,797 for the business share. The total is £9,327.
In this case actual costs beat the flat rate by about £827 in deductions. The tax saving is only a fraction of that difference, because the deduction lowers taxable profit rather than tax owed. The extra effort of receipts is the trade-off.
Driver B: Sam, older paid-off car, 12,000 business miles
Sam drives an older car he bought years ago with no capital allowances claimed. He drove 13,000 miles in total, 12,000 for business, so the business share is 12 divided by 13, about 92.3%. Assume the car is fully paid off and there are no allowances to claim.
Flat rate: 10,000 miles at 55p is £5,500. The other 2,000 miles at 25p is £500. The total is £6,000.
Actual costs: assume fuel £1,800, insurance £2,100, servicing £900, road tax £190, MOT £55 and breakdown cover £100. That is £5,145. Multiplied by 92.3% this is £4,749.
Here the flat rate wins by about £1,251. Sam claims more, keeps fewer records and does not need receipts. This is the pattern where a high-mileage driver in a cheap-to-run older car is better off on the flat rate.
| Driver | Business miles | Flat rate | Actual costs | Higher deduction |
|---|---|---|---|---|
| Amir (new hybrid) | 22,000 | £8,500 | £9,327 | Actual costs, by about £827 |
| Sam (older car) | 12,000 | £6,000 | £4,749 | Flat rate, by about £1,251 |
For the mileage allowance 2026, these figures show why nobody can name a winner without your numbers. Change the price of the car, the fuel bill or the miles and the result flips. Run your own inputs through our calculator before you make the first claim on a vehicle.
How do I choose between the two methods? A step-by-step check
Choose by working out both totals on your real numbers before the first claim on the car, because the flat rate cannot be dropped later. The steps below take about half an hour with your records to hand. Repeat them whenever you change vehicle.
- Add up your total business miles for the tax year from your mileage log, and separate private miles.
- Work out the flat rate total: 55p on the first 10,000 business miles and 25p on every mile after that.
- List your actual running costs for the year: fuel, insurance, servicing, repairs, road tax, MOT and breakdown cover.
- Multiply the running costs by your business-use share, which is business miles divided by total miles.
- Add any capital allowance on the car, reduced to the business share, using the rate that matches its emissions.
- Compare the two totals, and remember the flat rate must then continue on that vehicle.
- Keep the calculation with your records so you can show HMRC how you decided.
What mileage records should a night driver keep?
Keep a record of each shift or journey: the date, the start and end points or odometer readings, and the business purpose. A dated running log, either an app or a notebook, is more reliable than a year-end estimate. Check GOV.UK for how long you must keep business records.
Night work has its own traps. Trips home after your last job are commuting rather than business, and private trips in the same car must be kept out. Our guide to HMRC mileage records and bookkeeping sets out what a good log looks like.
How does this fit with the rest of my expenses?
Your mileage allowance 2026 claim is one line in your accounts. Other allowable costs, such as phone, licence fees, DBS, medical and business-only car cleaning, sit alongside it. Which ones apply depends on the method you use. Our allowable expenses guide for Uber drivers lists the full set.
Compare this with a different city if you like. We cover the same question for a Greater Manchester audience in our car mileage allowance guide for Manchester drivers. The rates match everywhere in the UK, but licensing rules and costs vary by council.
Common mistakes and the penalty each triggers
- Claiming the flat rate and also fuel or insurance for the same car. This double-counts, and an overstated claim can lead to an inaccurate-return penalty, plus tax and interest.
- Using the 45p rate from an old guide. You underclaim and pay too much tax, though no penalty applies.
- Counting commuting or private trips as business miles. This inflates the claim and can trigger a penalty if HMRC finds the log does not stand up.
- Estimating a year of mileage at the last minute with no log. If HMRC opens an enquiry you may have no way to support the figure, and the claim can be removed.
- Claiming capital allowances on a car and then trying to use the flat rate on it. GOV.UK does not allow it, so your return would need correcting.
- Missing a licence renewal. This is a Leeds City Council matter rather than a tax one, but working without a valid licence stops your income altogether.
Penalties for inaccurate returns depend on why the error happened, and HMRC can also charge interest. If HMRC questions your mileage or opens an enquiry, professional representation is strongly recommended before you reply. See our HMRC support service if that happens.
Key terms
- Simplified expenses: HMRC's flat-rate method for vehicle costs, working from home and living at business premises.
- Capital allowances: tax relief for the cost of buying a business asset such as a car, given over time or in one go.
- Business-use share: the percentage of a car's total miles that were business miles.
- DBS (Disclosure and Barring Service): the criminal-record check that private hire licensing requires.
- Class 4 National Insurance: the contribution self-employed people pay on profits above a threshold.
- PHV (private hire vehicle): a car licensed to carry passengers booked in advance.
How Uber Driver Accountant helps
We are independent accountants for private hire, Uber, Bolt, black cab and delivery drivers, and we have no link with any platform. Our personal tax service starts at £20 a month on fixed fees. We run the mileage-versus-actual comparison on your real numbers and file your return.
If you are in the city, see our Leeds driver accountant page. You can also see what is included on our pricing page. Diarise your deadlines using our key tax dates guide.
Conclusion
The mileage allowance 2026/27 gives Leeds night drivers 55p a mile for the first 10,000 business miles and 25p after that, and it is often the better choice for an older car with high mileage. A newly bought car with capital allowances can win on actual costs. Compare both before the first claim. Contact us for a free look at your numbers.
Last reviewed 19 September 2026 by the Uber Driver Accountant tax team.
This article is general information and is not personal tax advice. Rates, fees and council rules change, so check the linked GOV.UK and Leeds City Council pages and speak to a qualified accountant about your own position.
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