Mileage Rate 2026 in Manchester: Step-by-Step Guide to Counting Business Miles

The mileage rate 2026 for self-employed drivers is 55p a mile for the first 10,000 business miles in the 2026/27 tax year, then 25p a mile. The harder question for a Greater Manchester private hire driver is which miles are business miles in the first place, and this guide answers it one journey at a time.

We cover the drive from home to your first pickup, empty miles between jobs, repositioning towards the city centre or the airport area, the drive home after your last job and personal detours. Then we show how to split your log at 6 April 2026 and how to apportion a trip that carries you past the 10,000th mile. If you want the rate basics or the story of the 2026 rate change, our Manchester car mileage allowance guide and the 2026 update for Manchester drivers already cover them.

Key takeaways

• The mileage rate 2026 is 55p for the first 10,000 business miles and 25p after that, retrospective to 6 April 2026. Miles driven before that date used 45p.
• HMRC has no rule written specifically for app-based drivers. The answer comes from its general test: was the trip wholly for your trade, and where is the base of that trade?
• Miles driven while logged on, whether to a pickup, with a passenger or between jobs, are the strongest claims. The first and last legs of the day need a view on where your base is.
• Personal detours never count, even in the middle of a shift. Subtract them trip by trip.
• Split your log at midnight on 5 April, and split any single trip that crosses your 10,000th business mile.

What is the mileage rate 2026?

The mileage rate 2026 is HMRC's flat simplified-expenses rate for each business mile a sole trader drives in a car or van: 55p for the first 10,000 business miles in the 2026/27 tax year and 25p for every business mile after that. It replaces fuel, insurance, servicing and depreciation.

What is the mileage rate 2026/27, and how does it compare with 2025/26?

For 2026/27, cars and goods vehicles get 55p a mile for the first 10,000 business miles and 25p a mile after that. For 2025/26 and earlier years, the first band was 45p. Motorcycles stay at 24p. According to HMRC's guidance on simplified expenses for vehicles, the mileage rate 2026 applies from 6 April 2026.

The HMRC policy paper on increasing mileage rates, published on 17 June 2026, confirms the rise is retrospective to 6 April 2026. It also repeats a long-standing rule: once you choose a method for a vehicle, you keep it while that vehicle stays in the business. Black cabs and other cars designed for commercial use cannot use the flat rate at all.

Why does the type of mile matter more than the rate?

Because the mileage rate 2026 only multiplies whatever total you put in front of it. A driver who leaves out 2,000 genuine business miles loses up to £1,100 of deduction at 55p. A driver who counts 2,000 private miles as business overstates the claim by the same amount and risks a penalty. Classification is where the money sits.

Most of the guides we read while preparing this article stop at the two rates and a worked total. None of them takes a private hire shift apart and asks which legs of it are business. That is what the rest of this guide does, using HMRC's own manuals rather than rules of thumb.

How does HMRC decide whether a journey is a business journey?

HMRC asks whether the journey was made wholly and exclusively for your trade, and where the base of that trade is. Travel between home and a fixed place of business is treated as private. Travel from a home base to varied, unpredictable places of work can be business. No HMRC page deals with app-based drivers directly.

GOV.UK's page on travel expenses if you're self-employed lists travel between home and work among the costs you cannot claim. That sounds simple until you ask where a private hire driver's work is. Your passengers are somewhere different every hour, and in Greater Manchester they could be in any of the ten boroughs.

HMRC's Business Income Manual fills the gap with case law. At BIM37620 it says that where an itinerant trader's base is at home, travel between home and the places they work can be allowed. At BIM37635 it contrasts a bricklayer sent to unpredictable sites, whose home was his base, with a milkman who drove daily to a fixed depot and could not deduct that travel.

The test that falls out of this is predictability. If you start each shift by going online wherever you are and taking whatever job comes, your pattern looks itinerant. If you drive to the same office, rank or car park every day before your first fare, that place starts to look like a fixed base, and the drive to it starts to look like commuting.

Which journeys count? A decision table for Greater Manchester drivers

We built this table from the HMRC guidance above and our own working practice with drivers. Strong means we would normally expect the miles to count as business. Needs a view means the answer depends on your working pattern and is worth agreeing with an accountant before you file.

How do I count my business miles step by step?

Record your odometer at the start of the tax year, log every shift with its logged-on and logged-off times, classify each leg using the table above, subtract personal detours, then total business miles by tax year. The mileage rate 2026 then does the rest: 55p for the first 10,000 business miles and 25p after that.

1. Read and photograph your odometer on 6 April, or as close to it as you can, and again on 5 April. The difference is your total mileage, the figure every business percentage is checked against.
2. At the start of each shift, note the odometer and the time you go online. If you leave home already logged on, write 'online from home'.
3. During the shift, keep the app's trip records. They show pickup and drop-off times, which support your passenger and pickup miles.
4. Note any personal stop as it happens: where it was and roughly how many extra miles it added.
5. At the end of the shift, note the time you log off and the odometer reading. If you drive home after logging off, record that leg on its own line.
6. Once a week, total the business legs and add them to your running total for the tax year. Flag the week you expect to pass 10,000 business miles.
7. At the year end, check that business miles plus private miles equal the odometer difference. Then apply the mileage rate 2026 bands: 55p for the first 10,000 business miles and 25p for the rest.

Our mileage calculator applies both bands for you. For what a log needs to contain to stand up to a check, see our guide to HMRC mileage logs and bookkeeping.

Can I claim the drive from home to my first job?

Possibly, but it depends on your pattern. If you go online at home and drive straight to whichever pickup you are given, there is a reasonable argument that home is the base of an itinerant trade. If you drive first to the same fixed place every day, that leg looks like commuting and is unlikely to count.

In Greater Manchester the difference is real. A driver in Wigan who logs on at the front door and is sent to Leigh is in a different position from one who drives to the same city-centre car park each morning before switching on. The first pattern resembles the unpredictable sites in HMRC's manual; the second resembles the milkman's depot.

Our approach is to keep these legs visible in the log as a separate category. That way, the claim can be made or left out once your pattern is clear, without rebuilding a year of records.

Do empty miles between jobs count as business miles?

Generally yes. Driving from a drop-off to your next pickup, or moving around while logged on and waiting for the next request, is part of earning fares rather than going home or running errands. Keep the app's logged-on times, because they are your evidence that the empty miles were part of a working shift.

These dead miles can be a large share of a city shift. A run back from the airport area to Oldham with no passenger is still a business journey if you were available for work. The risk comes when logged-on time overlaps with personal plans, such as heading towards a friend's house with the app on.

What about repositioning to busier areas?

Moving towards demand is normally a business decision. Examples include heading from a quiet suburb into the city centre on a Saturday night, or towards the airport area for early flights. Write down why you moved if it is not obvious. Where a move also takes you closer to home at the end of a shift, the dual purpose weakens the claim, so treat the last move of the night with care.

Is the drive home after my last job a business journey?

It mirrors your first journey of the day. If home is accepted as the base of your trade, the return from your last drop-off can be business mileage. If your trade is based somewhere fixed, or you log off and head home for the night, HMRC is likely to see that leg as private.

A practical middle path we often use is simple. Miles driven while you are still logged on and accepting work count as business, and the leg after you log off goes on its own line. If you accept one last job on the way home, the miles to that pickup and the trip itself are business, and the drive on from the drop-off follows your first-leg treatment.

How do personal detours affect a business trip?

Subtract them. A detour for shopping, a school run or a personal visit is private, even if the app was on and you were between jobs. Claim the miles the business trip would have taken and leave out the extra. A journey with a personal purpose mixed in cannot be counted in full.

The easiest record is a short note at the time, such as 'detour to supermarket, plus 3 miles'. Over a year these small amounts add up, and a log with no private miles at all looks implausible for a car that is also your family car.

How do I split my mileage log at 6 April 2026?

Use the tax year in which each mile was driven. Miles up to midnight on 5 April 2026 belong to 2025/26 and use 45p for the first 10,000. Miles from 6 April 2026 belong to 2026/27 and use the mileage rate 2026 of 55p. Each tax year has its own fresh 10,000-mile band, so the count restarts.

For a night driver, a shift that runs past midnight on 5 April falls across two tax years. The cleanest record is an odometer reading or app timestamp at midnight, so the miles before go into 2025/26 and the miles after go into 2026/27. If you missed it, a reasonable split by trip times is better than putting the whole shift into one year.

This matters now. Your 2025/26 return is due online by 31 January 2027 and must use 45p for its first band, while the 2026/27 figures you are building up this year use 55p. If your accounts do not end on 5 April, our Sheffield mileage rate guide explains why that needs extra care.

How do I apportion a trip that crosses 10,000 business miles?

Under the mileage rate 2026, split the trip at the 10,000th business mile. The miles that bring your yearly total up to 10,000 earn 55p, and the rest of that same trip earns 25p. Do not put the whole trip in either band. A running total kept every week tells you which trip it was.

Say your log shows 9,986 business miles before a 23-mile job from the airport area on a Tuesday morning. The first 14 miles take you to exactly 10,000 and earn £7.70 at 55p. The other 9 miles earn £2.25 at 25p, so the trip is worth £9.95, not £12.65 or £5.75.

Over a full year that split changes the claim by only a few pounds. The reason to do it properly is that it proves your running total is real. A log where the 10,000th mile lands on a suspiciously round date often signals a figure that was estimated rather than recorded. If you change cars during the year, check with an accountant how the band applies, because the method is chosen vehicle by vehicle.

Illustrative example: a Stockport driver's 2026/27 year

This is an illustrative example. The driver, figures and pattern are invented to show the method, not to predict your result.

Driver K is a self-employed private hire driver living in Stockport, licensed by a Greater Manchester council and using one saloon car and claiming the mileage rate 2026 under simplified expenses. Driver K goes online from home most days and takes whatever job comes first. The odometer moves 21,400 miles between 6 April 2026 and 5 April 2027.

If home is accepted as Driver K's base, business miles are 18,400. The claim is 10,000 miles at 55p (£5,500) plus 8,400 miles at 25p (£2,100), a total of £7,600. If the first and last legs are left out, business miles are 16,200, and the claim is £5,500 plus 6,200 miles at 25p (£1,550), a total of £7,050.

The gap is £550 of deduction, and it comes entirely from the first and last legs of each day. That is why we ask drivers to log those legs separately rather than fold them into a shift total. The 3,000 private miles are never part of either claim.

Common mistakes and the penalty each can trigger

According to HMRC's factsheet on penalties for inaccuracies in returns, there is no penalty if you took reasonable care. A careless error can cost up to 30% of the extra tax, a deliberate one up to 70%, and a deliberate and concealed one up to 100%. Keeping enough records is one of HMRC's own examples of reasonable care.

• Treating the whole odometer total as business. Private miles inflate the claim, and HMRC can amend the return and charge a careless-error penalty.
• Claiming the daily drive to a fixed rank, office or car park. This looks like commuting, and it is likely to be removed if HMRC checks.
• Ignoring mid-shift detours. Small amounts add up over a year and undermine trust in the whole log.
• Using 55p for 2025/26 miles. The higher rate starts on 6 April 2026, so the 2025/26 return uses 45p.
• Applying 55p to every mile. Every business mile after the 10,000th earns 25p.
• Rebuilding the log at the year end. An estimate is hard to defend and weakens any argument that you took reasonable care.

If HMRC opens a check into your mileage, get professional representation early. Our HMRC support service handles the correspondence for drivers.

Key terms

• Business mile: a mile driven wholly and exclusively for your self-employed trade.
• Dead miles: miles driven with no passenger, such as to a pickup or between jobs.
• Base of operations: the place your trade is carried on from, which decides whether the drive from home is business or commuting.
• Itinerant trade: a trade that by its nature moves between changing places of work.
• PHV: private hire vehicle, booked in advance and licensed by a local council.
• HMRC: HM Revenue and Customs, the UK tax authority.
• Simplified expenses: HMRC's flat-rate method for vehicle costs, open to sole traders and partnerships without a company partner.

How UK Driver Accountants helps

We work with drivers only, on fixed fees from £20 a month, and we are independent of any ride-hailing app. We review how your log treats the first and last legs, apply the right rate to each tax year and split the 10,000-mile band correctly. See our personal tax service, our bookkeeping for drivers and our fixed fees.

Our Manchester page explains how we work with drivers across Greater Manchester. If you are still weighing mileage against actual running costs, our guide to allowable expenses for ride-hailing drivers sets out both. Driving through your own company? See our guide to mileage for limited company drivers.

Conclusion

The mileage rate 2026 is generous on the first 10,000 business miles, but only if those miles really are business. Log the first leg, the last leg and every detour separately, split the year at midnight on 5 April, and split the one trip that crosses 10,000. GOV.UK says you must keep your records for at least 5 years after the 31 January deadline for the tax year.

If you would like us to check your mileage log before you file, contact us and we will tell you plainly which miles we think hold up.

Last reviewed 2 November 2026 by the UK Driver Accountants tax team.

This article is general information and is not personal tax advice. Speak to a qualified accountant about your own circumstances, and use professional representation if HMRC opens a check or charges a penalty.