Claim whichever genuinely gives the larger deduction over the life of the vehicle — but you can only claim either one if you kept a per-trip mileage log, so start there before the comparison is even worth having. As a rough shape: a high-distance courier in an ordinary, cheap-to-run car usually does best on the simplified mileage basis, and it costs almost nothing to administer. A driver in an expensive, heavily depreciating or unusual vehicle, or one covering modest annual distance, may do better claiming actual running costs — at the price of keeping every receipt for the vehicle all year.
What is the simplified mileage basis, exactly?
It is HMRC’s flat-rate option for the self-employed: you multiply your business miles by a published figure and claim the result, and that single number stands in for the whole running cost of the vehicle — petrol or diesel, insurance, road tax, servicing, repairs, and the vehicle’s depreciation through capital allowances. You do not claim those separately on top. Rates differ by vehicle type, and they use a two-band structure where the figure changes past an annual business-distance threshold, so take the current figures from GOV.UK rather than from any article, including this one.
A word on terminology, because it causes real confusion. The per-mile figures HMRC publishes as Approved Mileage Allowance Payments — AMAP — are the employee-and-employer regime, for reimbursing someone who drives their own car for an employer. The self-employed version is the simplified-expenses mileage rate, and it is that one that belongs in the expenses box on SA103S. People use "AMAP" loosely to mean both; the two regimes are not the same thing, and the distinction matters if you are both employed and self-employed in the same year.
What does claiming actual running costs involve?
Totalling everything the vehicle actually cost you for the year and claiming the business share of it, where the business share is a fraction derived from — inevitably — your mileage log. Business miles over total miles gives the fraction; the fraction is applied to fuel, insurance, servicing, repairs, MOT, breakdown cover, road tax and the rest. The vehicle itself is not simply expensed: a purchased vehicle is relieved through capital allowances under their own rules, and a leased or hired one through the lease payments, subject to HMRC’s restrictions.
The record-keeping burden is the real difference. The flat rate needs the log and nothing else. The actual-cost method needs the log plus every receipt, every renewal, every invoice, and an odometer reading at each end of the year so the total-miles denominator is real rather than assumed. That is not a reason to avoid it — for the right vehicle it is worth materially more — but it is a reason to decide deliberately rather than drift into it.
Why is the choice sticky for a vehicle?
Because HMRC does not let you swap basis year to year to whichever suits: once you claim the simplified flat rate for a particular vehicle, you are expected to keep using it for that vehicle for as long as you use the vehicle in the business. And it works in the other direction too — if capital allowances have already been claimed on a vehicle, the flat rate is generally not available for it afterwards.
The consequence is that the decision is made once, at the point a vehicle enters the business, and lives for years. A new vehicle is a fresh decision. This is the single most common thing UK drivers do not know about vehicle expenses, and the moment to find it out is before the first return, not in the third year when the sums have swung the other way.
It also means the comparison should be run over the vehicle’s expected life in the business rather than over one good year. A van bought outright is expensive in year one and cheap in year four; a flat rate is level throughout. Judging on the first year alone answers the wrong question.
Which one actually wins?
It depends on the vehicle and the annual distance, not on which figure sounds bigger in isolation. The factors that move the answer:
Notice what is not on that list: how much tax you want to save. Both methods are legitimate and both are audited the same way. The one that wins is the one the arithmetic says wins, run honestly on your own numbers — and for many couriers running a modest car at high distance, the flat rate wins on value and then wins again on the hours it does not cost you.
- Annual business distance: high distance favours the flat rate, because the deduction scales straight off the log
- How expensive the vehicle is to buy and to depreciate: heavy capital cost pushes toward actual costs and capital allowances
- How expensive it is to run: unusually high insurance, fuel or repair costs are absorbed — and so lost — by the flat rate
- Business-use proportion: heavy personal use shrinks the fraction that actual costs are claimed at
- How long the vehicle will stay in the business, since the choice is sticky for its whole working life
- How reliably you will keep a full year of vehicle receipts, because actual costs collapse without them
What can you claim on top, whichever basis you pick?
The costs that are not part of running the vehicle itself. Parking on a business journey, tolls, the congestion charge and clean-air zone charges sit outside the flat rate and are claimed separately — so a driver on the simplified basis is not giving those up. Confirm the current list with HMRC, because what the flat rate is defined to absorb is exactly the sort of detail that shifts.
What you cannot do is claim a cost twice. Fuel claimed inside the flat rate cannot also be claimed as a receipt; insurance absorbed by the flat rate cannot also be apportioned. Parking fines and speeding penalties are not allowable on any basis, however incurred. And the everyday non-vehicle costs of the work — the business share of your phone, the bag, the equipment, the platform fees, the insurance the work required — are claimed on their own merits regardless of which vehicle basis you chose.
What do you need to have kept before you can even choose?
A contemporaneous per-trip mileage log, because both methods are built on it and neither survives without it. The flat rate multiplies it. The actual-cost method divides by it. A driver who reaches January with fuel receipts but no log has not chosen the actual-cost method — they have chosen to have no vehicle claim they can support.
HMRC’s expectation of that log is the same one every tax authority has: each journey recorded separately with its date, distance, endpoints and business purpose, written at or near the time. Add an odometer reading at the start and end of the tax year if you might go the actual-cost route, since the total-miles figure is what makes the business fraction defensible. Keep it all for as long as HMRC requires records to be kept.
Once the log exists, running both calculations at year end takes minutes and the answer is arithmetic rather than opinion — which is the position you want to be in, because it is the only position from which the sticky choice can be made deliberately. Where the numbers are close, or the vehicle is unusual, that is the moment to pay an accountant for an hour.
BrewGig is an independent product and is not affiliated with, endorsed by or partnered with Uber, Deliveroo, Evri or any delivery or ride-hailing platform; all company names are the trade marks of their respective owners, used here only to describe how the work functions.