Your Actual Costs (annual amounts)
Reg. 07380272 · England & Wales · Est. 2010
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Total Simplified
£3,720.00
Total Actual
£3,200.00
Everything you need to know about HMRC simplified expenses for self-employed
What are simplified expenses?
Simplified expenses are flat rates set by HMRC that self-employed people can use instead of calculating the actual costs of running a vehicle, working from home, or living on business premises. They simplify your record-keeping because you only need to track miles driven or hours worked from home, rather than keeping every receipt for fuel, insurance, heating, and other costs. You can choose to use simplified expenses for some categories and actual costs for others.
Who can use simplified expenses?
Simplified expenses are available to sole traders and business partnerships (but not limited companies). You can use the flat rate for vehicles if you use a car, van, motorcycle, or bicycle for business. For working from home, you must use your home for 25 or more hours per month for business. For living on business premises, this applies if you live at your business premises such as a pub, B&B, or guesthouse. You cannot use simplified expenses for a vehicle you have already claimed capital allowances on.
How do vehicle simplified expenses work?
Instead of calculating the actual running costs of your vehicle (fuel, insurance, repairs, MOT, road tax, etc.), you multiply your business miles by HMRC's flat rate. For cars and vans, the rate is 45p per mile for the first 10,000 miles and 25p per mile thereafter. Motorcycles are 24p per mile and bicycles 20p per mile. You need to keep a mileage log recording each business journey, but you do not need to keep fuel or repair receipts.
Can I switch between simplified and actual expenses?
For vehicles, once you start using simplified expenses (flat rate mileage) for a particular vehicle, you must continue using that method for as long as you use that vehicle for business. You cannot switch back to claiming actual costs. However, if you replace the vehicle, you can choose either method for the new vehicle. For working from home and business premises, you can switch between simplified and actual costs from year to year.
HMRC-Aligned: This calculator uses official HMRC simplified expenses flat rates for the 2025/26 tax year. The comparison shown helps you decide which method gives the higher deduction for each category. For complex situations, consult a qualified accountant.
This calculator uses official rates and thresholds from:
Last verified: February 2026 · Tax year 2025/26. Results are indicative — consult a qualified accountant for personalised advice.
Reviewed by M. Samiuddin Quadri, ACCA — Chartered Certified Accountant at Gladstone & Co. · Updated for the 2025/26 tax year.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms