From April 2026, the HMRC approved mileage rate for cars and vans jumped from 45p to 55p per mile. It’s the first increase in over a decade, and for a self employed plumber driving thousands of business miles a year, the difference is significant.
Chancellor Rachel Reeves announced the increase on 21 May 2026, backdated to 6 April 2026 — the start of the 2026/27 tax year. The new rates apply to the first 10,000 business miles you drive in the tax year. After 10,000 miles, the rate stays at 25p per mile, which hasn’t changed.
Every business mile you drive up to 10,000 now reduces your taxable profit by 55p instead of 45p — a 22% increase in your mileage deduction overnight. This is exactly the kind of change Making Tax Digital is designed to keep you on top of, since your records need to be accurate every quarter, not just once a year.
| Annual business miles | Old rate (45p) | New rate (55p) | Extra deduction | Tax saving (20%) |
|---|---|---|---|---|
| 6,000 miles | £2,700 | £3,300 | £600 | £120 |
| 8,000 miles | £3,600 | £4,400 | £800 | £160 |
| 10,000 miles | £4,500 | £5,500 | £1,000 | £200 |
| 12,000 miles | £5,000 | £6,000 | £1,000 | £200 |
If you’re earning enough to pay 40% tax on some of your income, those savings roughly double.
HMRC is clear: a business mile is any journey wholly and exclusively for business purposes — driving between jobs, to the merchant for parts, to quote a customer, to training, or to your accountant. It does not include commuting to a fixed regular workplace.
The 55p rate covers everything — fuel, insurance, road tax, servicing, repairs, depreciation — with no receipts needed. Compare both methods with real numbers in Can I Claim My Van as a Self Employed Plumber.
The critical rule: once you choose simplified expenses for a vehicle, you must stick with that method for as long as you use it.
Log the date, start and end points, purpose, and miles for every journey — consistently, not reconstructed in January. Tools like PlumberLog record mileage against each job automatically and feed it straight into your tax report.
You can still claim parking, congestion charges, ULEZ and tolls on top of the mileage rate — they’re separate expenses. Parking fines are never allowable.
A plumber doing 8,000 business miles a year and not claiming them is handing over roughly £880 in unnecessary tax. See where mileage goes on your return in Self Employed Plumber Tax Return — Step by Step Guide.
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