How Simplified Expenses Save You Time
Simplified expenses are flat-rate deductions that HMRC lets you use instead of tracking actual costs for three specific types of expense. They save time and paperwork.[1]
They cover:
- Business use of your vehicle
- Working from home
- Living at your business premises
Vehicle Mileage Rates
Instead of tracking petrol, insurance, repairs, and depreciation, claim a flat rate per business mile:[2]
| Vehicle | First 10,000 Miles | After 10,000 Miles |
|---|---|---|
| Car or van | 45p per mile | 25p per mile |
| Motorcycle | 24p per mile | |
Important: Once you use the mileage rate for a vehicle, you must continue using it for that vehicle. You can’t switch to actual costs later. If you buy a new vehicle, you can choose afresh.[2]
Working from Home
If you work from home regularly, claim a flat rate based on the hours you work there each month:[3]
| Hours Worked at Home per Month | Flat Rate |
|---|---|
| 25–50 hours | £10 per month |
| 51–100 hours | £18 per month |
| 101+ hours | £26 per month |
Living at Your Business Premises
If you live at your business premises (e.g. a B&B, pub, or shop with accommodation above), you can claim a flat rate for the personal use portion:[4]
| People Living There | Monthly Deduction |
|---|---|
| 1 person | £350 |
| 2 people | £500 |
| 3+ people | £650 |
When to Use Simplified vs Actual Costs
Calculate both and pick whichever gives you the higher deduction. For example:[1]
- If you drive 15,000 business miles, the simplified rate gives you £5,750 (10,000 × 45p + 5,000 × 25p). If your actual vehicle costs are £4,500, simplified is better.
- If you work from home 30 hours/month, simplified gives you £120/year. If your actual costs (proportion of rent, utilities, broadband) are £800/year, actual is better.
Who Can Use Them
Simplified expenses are available to:[1]
- Sole traders
- Partnerships (but not for vehicles owned by the partnership)
They are not available to limited companies.
Record Keeping
You still need to keep records to support your claim — ideally digitally, ready for your MTD quarterly updates:[5]
- Mileage log for vehicle claims (date, destination, purpose, miles)
- Hours log for working from home (hours spent working each month)
Frequently Asked Questions
What are HMRC simplified expenses?
Simplified expenses are flat-rate deductions you can claim instead of tracking actual costs for three types of expense: business vehicle mileage, working from home, and living at your business premises.
What is the HMRC mileage rate for self-employed?
The flat rate is 45p per mile for the first 10,000 business miles in a car or van, then 25p per mile after that. Motorcycles are 24p per mile at all distances.
How much can I claim for working from home as self-employed?
The flat rate depends on hours worked at home per month: £10 for 25–50 hours, £18 for 51–100 hours, and £26 for 101 or more hours. Alternatively, you can claim a proportion of your actual household costs.
Can I switch between simplified expenses and actual costs?
For vehicles, once you choose the mileage rate you must continue using it for that vehicle. For working from home or business premises, you can switch methods each tax year.
Further Reading
- Allowable Expenses for Self-Employed — the complete list
- Mileage Allowance Rates (AMAP) Explained
- Working from Home Tax Relief
- Keeping Digital Records for MTD
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Sources
- Simplified expenses if you're self-employed — GOV.UK
- Simplified expenses: vehicles — GOV.UK
- Simplified expenses: working from home — GOV.UK
- Simplified expenses: living at your business premises — GOV.UK
- Expenses if you're self-employed — GOV.UK