Can I claim fuel costs as a business expense instead of using the mileage rate?

You can claim actual fuel costs instead of the HMRC approved mileage rate, but you must then claim all vehicle running costs (insurance, MOT, servicing, tyres, road tax, depreciation via capital allowances) rather than the flat mileage rate — and you must apportion everything for private use. The approved mileage rate method (45p per mile for the first 10,000 miles) is simpler and often more beneficial for most sole traders, because it avoids the complexity of tracking every cost and calculating private-use apportionments. The actual cost method may be advantageous if: you drive a high-mileage vehicle with low fuel efficiency, you drive many business miles, or your vehicle has very high running costs. Crucially: you cannot mix the two methods for the same vehicle in the same tax year. You must choose one and stick with it — and once you've used the actual cost method for a vehicle, you generally cannot switch to mileage rate for that vehicle.

• Two options: approved mileage rate (45p/25p per mile) OR actual fuel and running costs
• Cannot mix both methods for the same vehicle in the same year
• Actual costs: claim fuel, insurance, MOT, repairs, depreciation — but must apportion for private use
• Mileage rate is simpler and sufficient for most sole traders
• Once you use actual costs for a vehicle, switching to mileage rate later is restricted