Mileage allowance vs actual costs: which saves UK couriers more?

HMRC lets you claim either 45p per mile for the first 10,000 business miles (25p after) OR your actual vehicle costs. You can't switch mid-year on the same vehicle.

Worked example: 25,000 business miles

• Simplified mileage: 10,000 × 45p + 15,000 × 25p = £8,250
• Actual costs (fuel £4,800, insurance £1,400, repairs £900, depreciation £2,200): £9,300
• Result: actual costs win by £1,050 — worth keeping receipts

High-mileage couriers in older diesel vans almost always come out ahead on actual costs. Low-mileage drivers in efficient vans usually prefer simplified mileage for the paperwork saving.