Mileage Allowance 2026 in Making Tax Digital Quarterly Updates: Step by Step

Mileage allowance 2026 is claimed in a Making Tax Digital quarterly update as part of your travel expense total, built from a digital mileage log, with the rate worked out by how many business miles you have driven so far this tax year. From 6 April 2026 the simplified rate is 55p a mile for the first 10,000 miles and 25p after that, according to simplified expenses for vehicles on GOV.UK.

This guide is about the practical bit that most articles skip: what you actually enter or sync into each of the four updates, how the 10,000-mile band carries from quarter to quarter, and how to fix a figure later. We keep the rate rules short and link to our existing guides, so you will not read the same explanation twice.

The advice here suits sole-trade drivers who are inside Making Tax Digital for Income Tax, or who are getting ready for it. If you are not yet in scope, the mileage method is the same but the updates are not compulsory.

Key takeaways

• Each quarterly update carries totals by expense category, not individual journeys, and each update shows year-to-date totals, per quarterly updates guidance on GOV.UK.
• The 10,000-mile band runs across the whole tax year, so the 55p and 25p split depends on your running mileage total, not on one quarter alone.
• If a figure is wrong, correct your records and the change flows into your next update; check GOV.UK if the error is found after the fourth update.
• For 2026/27, HMRC says it will not apply penalty points for late quarterly updates, but late tax returns still count.
• Keep a digital mileage log; the update is only as accurate as the records behind it.

What is a mileage allowance in a quarterly update?

It is the simplified-expenses vehicle claim, 55p then 25p a mile for 2026/27, entered as part of your travel costs in a Making Tax Digital for Income Tax update. You report a category total for the update period, built from your digital records, rather than sending a log or receipts to HMRC.

Making Tax Digital (MTD) for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income above £50,000. The limit falls to £30,000 from April 2027 and £20,000 from April 2028, as set out in the GOV.UK guidance on using Making Tax Digital for Income Tax. If you are not sure which year applies to you, our guide on Self Assessment versus Making Tax Digital explains the timetable.

Where does mileage go in a quarterly update?

Mileage goes into the vehicle or travel expense category in your MTD-compatible software, and only the category total reaches HMRC. The quarterly update direction on GOV.UK lists travel among the expense categories. How your chosen software labels the simplified mileage line varies, so check its help pages and GOV.UK.

HMRC says individual receipts and invoices are not sent. Your software creates totals for each category from your digital records. That means your mileage log is a record you must keep and be able to produce, while the update carries only the number.

A common worry is whether you choose between simplified mileage and actual costs for each update. You do not choose per quarter. According to simplified expenses for vehicles on GOV.UK, once you use flat rates for a vehicle you must keep using them for as long as that vehicle is used in your business. Decide before the first update of the year, not after seeing the numbers.

How does the 10,000-mile band work across four quarters?

The 10,000-mile band is counted across the whole tax year, 6 April to 5 April. You claim 55p on business miles up to 10,000 and 25p on miles beyond that. In quarterly terms, track your cumulative miles; the rate changes in whichever quarter your running total passes 10,000.

Because each update shows year-to-date totals, the simplest method is to calculate the whole year-to-date claim each time and let the software show the difference. Multiply the first 10,000 cumulative miles by 55p and anything above by 25p to get the year-to-date deduction. Our guide to the 55p mileage allowance and the 10,000-mile switch covers the bookkeeping behind the switch in more depth.

If you use more than one vehicle in the same tax year, speak to an accountant about how the band applies. That situation needs checking against GOV.UK rather than guessing.

How to enter mileage in each quarterly update, step by step

Follow these steps for every update. They work whichever compatible software you use, because the logic sits in your records rather than in the screens. The aim is to arrive at each deadline with a clean cumulative mileage figure.

1. Confirm you are signed up and that your software is authorised. See the sign-up guidance on GOV.UK and our note on software authorisation.
2. Choose standard periods (6 April start) or calendar periods (1 April start) before your first update. Once you send one, you cannot change the period for that tax year, per quarterly updates guidance on GOV.UK.
3. Keep a digital log of every business trip: date, start and end point, purpose and miles. Our guide to mileage logs and bookkeeping shows a layout.
4. At the end of the update period, total the business miles driven since 6 April, not just in the latest quarter. That is your cumulative position.
5. Work out the year-to-date claim: the first 10,000 cumulative miles at 55p, then any excess at 25p. The mileage calculator does this for you.
6. Check that other travel costs such as parking and tolls sit in the right category and are not double counted inside the flat rate. See the GOV.UK list of expenses if you are self-employed.
7. Review the year-to-date total the software shows for travel costs and compare it with your own calculation before you send.
8. Send the update by the deadline: 7 August, 7 November, 7 February or 7 May for standard periods. HMRC lets you send up to 10 days before the period ends if you expect no further transactions.
9. Save the confirmation and keep the log and workings with your records for the year.

What are the quarterly update dates for 2026/27?

For standard periods the deadlines are 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027. Each update covers the period from 6 April to the end of that quarter, so figures accumulate. Calendar-quarter users have the same deadlines but periods starting 1 April; check quarterly updates guidance on GOV.UK.

Note that the period start stays at 6 April each time, which is why the figures are cumulative. A late update in 2026/27 does not earn a penalty point, according to HMRC, but a late tax return does. Do not treat that as permission to skip, because the rules change after 2026/27. Check GOV.UK.

Can I use estimates for mileage in a quarterly update?

Quarterly updates are meant to come from your digital records, so base the mileage figure on logged journeys wherever you can. GOV.UK's guidance does not say you may send rough estimates. If you cannot finish a log before the deadline, ask an accountant before sending a placeholder, and check GOV.UK.

In practice, drivers who log trips as they go rarely need an estimate. If a week of journeys is missing, reconstruct it from your diary, app trip history and fuel receipts, record how you did it, and tidy it up in the next update. Never inflate miles to fill a gap. Overstated mileage is the classic route to an HMRC enquiry, as our enquiry guide explains.

How do I correct a mileage figure in a later update?

Correct the entry in your digital records. Each update shows year-to-date totals, so the corrected total is included in your next update. If you spot an error after sending the fourth update, GOV.UK says to resend that update before making tax adjustments. Check quarterly updates guidance on GOV.UK for the latest wording.

This is one reason the cumulative approach is forgiving. You do not need a separate amendment for a missed Quarter 1 trip found in Quarter 3. Add it to your records with the correct date and the next update will pick it up. Keep a note of what changed and why.

What if the correction crosses the 10,000-mile line?

Adding late miles can move some of your total from the 55p band into the 25p band, which lowers the average rate. Recalculate the whole year-to-date claim from the corrected cumulative mileage rather than adjusting just the one quarter, then compare it to what you sent before.

Illustrative example: four quarters for one driver

This illustrative example uses an invented driver, Sam, who drives 12,000 business miles in 2026/27 and uses simplified mileage on one car. The figures are made up to show the mechanics, not a benchmark. Sam's quarterly miles are 2,900, 3,400, 3,100 and 2,600.

In Q4 only 600 miles sit in the 55p band, because the running total reached 10,000 during the quarter. That is 600 x 55p = £330. The remaining 2,000 miles at 25p add £500, giving £830. The full year is 10,000 x 55p = £5,500 plus 2,000 x 25p = £500, which is £6,000.

Now suppose in Q3 Sam finds 200 forgotten miles from Q1. Cumulative miles at the Q3 update become 9,600 and the year-to-date claim becomes £5,280, so £110 more than before. No separate amendment is needed. If Q4 ends at 12,000 in total anyway, the year-end claim stays £6,000.

Does the mileage rate change affect quarterly updates already sent?

The 55p rate is retrospective to 6 April 2026, so mileage driven earlier in the year qualifies at the higher rate for the first 10,000 miles. If you sent an update using the old 45p rate, recalculate the year-to-date figure at 55p and include it in your next update. See our HMRC mileage 2026 MTD update.

How does this fit with the rest of your MTD routine?

Quarterly updates are one part of the cycle. After the fourth update you still finalise the year through the end-of-year steps and a final declaration. For the wider picture, read our guide to Making Tax Digital for ride-hailing drivers in 2026 and the piece on what changes for Self Assessment clients.

Comparison: where mileage numbers can go wrong

Common mistakes and the penalty each triggers

• Using only the quarter's miles to decide the rate: this can understate or overstate the claim, and an incorrect return can lead to a penalty for inaccuracy, so check GOV.UK for current penalty rules.
• Mixing simplified mileage with actual vehicle costs on the same vehicle: GOV.UK says you cannot use simplified expenses once capital allowances have been claimed on it.
• Claiming commuting: ordinary home-to-base travel does not qualify, and wrongly claimed costs can lead to tax, interest and penalties on the error.
• Missing an update deadline: no penalty points for late quarterly updates in 2026/27, but later years can bring points and a £200 penalty at four points, per GOV.UK.
• Switching method part-way through the year: once you use flat rates for a vehicle you must continue for that vehicle, so changing creates an inaccurate claim.
• No mileage log: without records you cannot support the figure if HMRC asks, so the claim may be disallowed.

Key terms

• MTD: Making Tax Digital, HMRC's system of digital records and updates.
• Quarterly update: a summary of income and expense totals sent to HMRC for each update period.
• Cumulative total: the running total from 6 April to the end of the current update period.
• Simplified expenses: flat-rate vehicle costs instead of actual running costs.
• Qualifying income: the combined self-employment and property income used to decide whether MTD applies.

How UK Driver Accountants helps

We are an accountancy for drivers only, independent of any ride-hailing app, with fixed fees from £20 a month. We set up your digital records, check the mileage split before every update, and send the updates for you. See our Making Tax Digital service and pricing.

Conclusion

Entering mileage in a quarterly update is simple once you think cumulatively: log trips, total miles since 6 April, apply 55p then 25p, send, and correct in the next update if needed. If you want help, contact us and we will check your first update with you.

Last reviewed 14 November 2026 by the UK Driver Accountants tax team.

This article is general information and is not personal tax advice. Rates, thresholds and deadlines can change, so check GOV.UK and speak to a qualified accountant about your circumstances. If HMRC raises an enquiry or penalty, professional representation is recommended.