To calculate the business expense for a director’s use of a personal vehicle for business journeys in the UK (tax year 2025/26), use the HMRC Mileage Allowance Payments (MAPs). This method reimburses a fixed rate per business mile and is straightforward, tax-free up to the approved rates, and covers all operating costs (fuel, maintenance, insurance, tax, etc.).

HMRC-approved rate for 2025/26 for Cars and vans is 45p per mile for the first 10,000 business miles in the tax year, then 25p per mile for any further business miles.

Rather than using HMRC’s fixed mileage rates, use of Motor Vehicle can be also calculated as a percentage of the total use of the car.

For example, the director can calculate how many miles they use the motor vehicle for business purposes then determine the percentage to the total mileage for the year.’

Example

• Total miles in the year: 12,000
• Business miles: 4,000

Business Use Percentage = (4,000/12,000) ×100 = 33.3%

You can then claim this percentage of eligible running costs (fuel, insurance, servicing, car tax, etc.) as a business expense. This apportionment method needs the director to keep full records of all the motor vehicle running expenses. HMRC can make requests to see the receipts and records for any business anytime. Records should be kept for up to 6 years after any transaction in business.