# UK self-employed: simplified AMAP method vs actual costs

> UK sole traders choose between flat-rate AMAPs and the actual-cost method. Comparison.

**Author:** James Mitchell — UK Tax Specialist (HMRC)  
**Published:** 2026-04-09  
**Updated:** 2026-04-28  
**URL:** https://quilometragem.com/blog/uk-self-employed-simplified-amap-method-vs-actual-costs

**TL;DR:** UK sole traders choose between flat-rate AMAPs and the actual-cost method.

- A UK sole trader (and many partners in partnerships) can deduct vehicle expenses using either: A — Simplified flat rate (AMAP-style): 45p/mile for the first 10,000 business miles in the basis period, 25p/mile thereafter.
- Once you choose simplified for a vehicle, you must keep it until you stop using that vehicle for business.
- Tom is a freelance designer who drives 12,000 business miles per year in a 2-year-old VW Polo (purchase price £14,000).
- For simplified method: just keep a mileage log with date, miles, purpose.
- If you're VAT-registered, neither method changes how you reclaim input VAT on fuel.

## Two methods, one choice

A UK sole trader (and many partners in partnerships) can deduct vehicle expenses using either:

**A — Simplified flat rate (AMAP-style)**: 45p/mile for the first 10,000 business miles in the basis period, 25p/mile thereafter.[^hmrc-simplified-80] No claim for actual fuel, repairs, insurance, depreciation. Tolls and parking still claimed separately.

**B — Actual costs**: claim the business proportion of every running expense (fuel, repairs, insurance, MOT, road tax) plus capital allowances on the vehicle. Requires a percentage split based on business vs private mileage.

## When the simplified method wins

- Lower-mileage sole traders who don't want to track every petrol receipt.
- Newer vehicles with high depreciation that would otherwise lock you into capital allowances for years.
- Anyone who values time over a few hundred pounds: 95% of sole traders we work with prefer the simplified method.

Once you choose simplified for a vehicle, you must keep it until you stop using that vehicle for business. You can't flip year by year.

## When actual costs win

- High-mileage sole traders (>15,000 business miles/year) where actual fuel + maintenance + capital allowances exceeds AMAPs.
- Owners of expensive vehicles (>£20,000) where capital allowances at 18% or 6% main pool/special rate are material.
- Electric vehicles where the first-year allowance can give a significant tax saving.

## Worked comparison

Tom is a freelance designer who drives 12,000 business miles per year in a 2-year-old VW Polo (purchase price £14,000). His total annual miles are 18,000 (so business use is 67%).

**Method A (simplified)**: 10,000 × 45p + 2,000 × 25p = £4,500 + £500 = £5,000.

**Method B (actual)**:
- Fuel: £1,800 × 67% = £1,206.
- Insurance: £750 × 67% = £502.
- MOT + service: £450 × 67% = £301.
- Road tax: £165 × 67% = £110.
- Capital allowances (18% main pool): £14,000 × 18% × 67% = £1,688.
- Total: £3,807.

In Tom's case, simplified wins by £1,193.

## Practical record-keeping

For simplified method: just keep a mileage log with date, miles, purpose. That's it. Quilometragem PDF receipts are sufficient.

For actual costs: keep every receipt for fuel, repairs, insurance, plus a complete mileage log to compute the business proportion. Significantly more admin.

## VAT (if registered)

If you're VAT-registered, neither method changes how you reclaim input VAT on fuel. You still need fuel VAT receipts and apply Advisory Fuel Rates to compute reclaimable VAT on the business proportion.

## Bottom line for 2026

For most UK sole traders driving under 15,000 business miles in a vehicle under £20,000, the simplified method is faster, lower-risk and almost always preferable. Switch to actual costs only if you've modelled the numbers and the gap is meaningful.

## Sources

- [HMRC — Simplified expenses if you're self-employed](https://www.gov.uk/simpler-income-tax-simplified-expenses) — HMRC (2026-04-28)