Mileage or actual costs: which is best for your van?
Updated 7 October 2026 · 2026/27 tax year
There are two ways to claim for a van you use for work. You can't use both for the same van, and once you pick one you usually stick with it while you have that van.
Option 1: mileage (simplified expenses)
Claim 45p for each business mile for the first 10,000 miles in the tax year, and 25p a mile after that. It covers fuel, insurance, servicing, repairs, tax and the cost of the van itself, so you don't claim those separately. You only need a record of your business journeys.
Option 2: actual costs
Claim the business share of what the van really costs: fuel, insurance, servicing and repairs, road tax, breakdown cover, and the van itself when you buy it. Keep every receipt, and work out what share of the miles are for business.
A worked example
- 10,000 business miles a year on mileage: £4,500
- Actual costs: £2,200 fuel, £900 insurance, £600 repairs, £300 road tax = £4,000, plus buying the van
If you've just bought a van, actual costs can be worth much more in that year, because the cost of the van counts. If you drive a lot in an older, paid-off van, mileage is often simpler and as good.
Things to know
- Cars are different: buying a car isn't claimed as a cost, so ask your accountant about capital allowances
- Parking and tolls on business journeys can be claimed with either method
- Travel to a permanent workplace (like a yard you go to every day) isn't business mileage
- If you sell a van you claimed for, what you get for it counts as income
This guide is general information, not tax advice. Check HMRC's guidance or ask an accountant about your own situation.