This article first appeared on Invoala.
HMRC's approved mileage rates — 45p per mile for the first 10,000 business miles in a tax year, 25p per mile after that — are the standard UK answer, and most freelancers and sole traders charge clients at those rates for car travel. But it's worth being clear about what those numbers actually are: they're the maximum you can claim against tax without keeping detailed running-cost records. They're not a legal price cap, and they're not an obligation. What you recharge to a client is a commercial decision, and the "right" figure depends on whether you're reclaiming a cost, covering one, or billing for your own time spent driving.
The short answer: 45p and 25p, and what they're for
The two figures you'll see everywhere are HMRC's simplified mileage rates for cars and vans:
- 45p per mile for the first 10,000 business miles in a tax year
- 25p per mile above that
- 24p per mile for motorcycles
- 20p per mile for bicycles
Those rates apply per tax year (6 April to 5 April), and they cover the running costs of the vehicle — fuel, insurance, servicing, tyres, depreciation — rolled into one number. If you use the simplified approach, you claim the rate and don't claim those costs separately. If your actual running costs are higher (a leased vehicle, heavy fuel use, high maintenance), you can use the actual-costs method instead, but that means keeping receipts and a mileage log.
Rates and thresholds do change from time to time and can differ for other vehicle types, so check the current figure on the official GOV.UK mileage rates page before you build a price list around it.
One thing the HMRC rate does not answer: how much you charge a client. For a self-employed person billing a client, mileage is usually a cost you recharge, and you can recharge it at the HMRC rate, above it, or at a flat fee. There's no rule that says a client-facing mileage charge must equal the approved rate. It just happens to be the most common and most easily justified number.
Photo by Markus Spiske on Unsplash
What to charge: three approaches that actually work
1. Recharge at the approved rate (45p/25p per mile). This is what most UK freelancers and contractors do. It's simple to explain, easy for a client's accounts team to accept, and mirrors what many clients pay their own staff who drive for work. Recommended services and end clients see the number often enough that it doesn't prompt questions.
2. Recharge at cost, plus a margin. If your real running costs work out higher than 45p — or you're driving a larger vehicle — you might bill 50p or 60p per mile. This is defensible if you can show clients what's involved, but it's easier to push back on. Expect it to be queried by procurement teams.
3. Charge a flat travel fee. "Site visit within 30 miles of Leeds: £35 flat" is cleaner than per-mile maths, easier to predict for the client, and avoids arguments about route length. It works well for repeat visits to the same location.
Whatever you pick, put it in writing before the travel happens — in your quote, engagement letter or a line in the estimate. If a client later disputes a mileage line, having agreed the rate beforehand is the difference between a quick resolution and a written-off invoice.
If you want to send travel as part of a fixed-price job, a free estimate generator is a reasonable place to itemise the travel element up front, so the client sees it before the work starts rather than as a surprise line on the final bill.
Example: invoicing 240 miles of client travel with VAT
Say you're a self-employed consultant, VAT-registered, and you drove 240 miles over three days to a client's site in March. You agreed 45p per mile when you quoted.
- Mileage: 240 miles × £0.45 = £108.00
- Consultancy day rate: 2 days × £450 = £900.00
- Subtotal: £1,008.00
- VAT at 20%: 0.20 × £1,008 = £201.60
- Total due: £1,209.60
If you're not VAT-registered, the invoice stops at £1,008.00. If you're using the flat-rate VAT scheme, you don't charge 20% — you apply your flat-rate percentage to the gross total, so the arithmetic looks different. And note the VAT point below: whether VAT applies to a mileage recharge depends on the nature of the recharge, not just on whether you're registered.
On the invoice itself, list mileage as its own line with the miles, the rate and the route or purpose in the description ("Mileage — 240 miles @ £0.45, client site visits 3–5 March"). Don't bury it in a "expenses" lump. Clients reconcile lines against their own records, and a vague line is the first thing that gets queried.
The VAT question, and where it gets murky
Whether you add VAT to a mileage recharge depends on whether it's a disbursement or part of your own supply.
A disbursement is something you paid for on the client's behalf — you acted as their agent, the client was invoiced directly, and you're just passing the cost through. Genuine disbursements are outside the scope of VAT, so no VAT is added. You also can't reclaim the input VAT on them.
Most mileage doesn't meet that test. The fuel, insurance and wear on your own car are your costs, and recharging them is generally part of your supply of services — which means it's usually standard-rated along with the rest of your invoice.
This area has enough grey edges that it's worth checking the official VAT guidance or asking an accountant if the sums are significant. For small amounts, following the general rule (VR on the recharge, standard-rated as part of your service) is what most VAT-registered sole traders do — but confirm it against HMRC's published guidance rather than a blog post, including this one.
Record-keeping matters here too. For each trip, log the date, start and end point, total miles, and the purpose. HMRC accepts a mileage log rather than every fuel receipt under the simplified scheme, but you still need to be able to show that the mileage was business, not commuting. Commuting between home and a permanent workplace doesn't qualify; travel to a temporary or client site usually does, and there are exceptions around temporary workplaces.
How Invoala helps
Once the rate is agreed and the miles are logged, the invoicing part shouldn't take longer than the drive did.
- Open Invoala's free invoice generator — there's no sign-up and no watermark on the output.
- Fill the client and your business details in the form, then add each charge as a line item: your day rate or hourly work first, then a mileage line with the miles, the per-mile rate and the purpose.
- Let it calculate the subtotal, then add VAT at 20% if you're registered and the recharge is standard-rated.
- Download the PDF — it's formatted to A4, so it prints and files the way a UK client's accounts team expects.
- Send it, then use invoice payment tracking to see at a glance what's paid, due or overdue across clients.
The bit that saves real time on mileage-heavy months is automated follow-ups: Invoala's invoice reminders chase unpaid invoices for you, so a client who's slow to approve a travel expense doesn't mean another three emails from you. Invoala is free to use, with an optional paid upgrade if you want extra features — the pricing is on the Invoala pricing page.
If you're new to billing altogether, there's a step-by-step walkthrough on how to create an invoice, and freelancers coming from employment often find the freelancer invoicing guide useful for the basics of rates, terms and late payment.
Practical rules to settle before the next trip
- Agree the rate in writing in the quote or engagement letter, not after the fact.
- Decide whether you charge one rate or the 45p/25p structure. Most clients only ever see the first 10,000 miles, so the higher rate does the work.
- Show mileage as a separate line item with miles, rate and purpose.
- Keep a mileage log with dates, routes and business purpose — you'll need it for both the client and HMRC.
- Check the current HMRC rate and VAT treatment on GOV.UK rather than relying on a rate you read last year.
- Invoice promptly and follow up on anything unpaid.
None of that is complicated, but the difference between getting paid without friction and chasing a query for six weeks is almost always in whether the rate and the line item were clear from the start.
Originally published at How Much to Charge Clients for Mileage in the UK (2025). More guides at Invoala.
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