Can I claim my car as a sole trader?

Yes, for business journeys. In 2026-27 you can claim 55p a mile for the first 10,000 business miles, or the business share of the actual costs plus capital allowances on the car's price. You choose one method per car.

This page is for self-employed tradespeople who use a car, not a van, for work. The rules follow GOV.UK and HMRC's manuals as checked on 17 October 2026. Our guide to van mileage covers the flat rate in more detail, because cars and vans share the same rates.

Two ways to claim

GOV.UK says you cannot use the flat rate for a vehicle you have already claimed capital allowances on, or included as an expense. Once you use the flat rate for a car, you must keep using it for as long as that car is in your business. You can use different methods for different vehicles.

Why a car is different from a van

On the cash basis, the standard way for sole traders to work out profit, most things you buy for the business are claimed as an expense, vans included. Cars are the exception. GOV.UK says that if you buy a car for your business, you claim the purchase as a capital allowance, as long as you are not using the flat rate for it. HMRC's manual lists a car among the costs that cannot be claimed as an expense on the cash basis.

Cars also cannot get the annual investment allowance, which vans can. GOV.UK defines a car for capital allowances as a vehicle suitable for private use that most people use privately and that was not built to carry goods. HMRC's manual says most, if not all, double cab pick-ups bought from 6 April 2025 count as cars, as our double cab pick-ups guide explains.

Capital allowances on the car's price

For a car bought from April 2021, GOV.UK sets the allowance by its CO2 emissions:

The main rate fell from 18% to 14% on 6 April 2026 for Income Tax. HMRC's manual says the 100% first-year allowance applies to spending up to 5 April 2027 for Income Tax, and a hybrid does not qualify because it also has an engine that produces CO2.

If you also drive the car privately, it goes into its own pool, called a single asset pool, and you claim only the business share of each year's allowance. GOV.UK's example is a main rate car with a £10,000 balance used for the family half the time: the claim is £700, half of £1,400.

Which journeys count

Only business journeys count. GOV.UK says travel between home and work cannot be claimed. Many tradespeople drive from home to different sites. Our guide on travel from home to site explains where the line falls.

GOV.UK also says you cannot claim fines or penalty charges, so speeding tickets and parking fines stay out. Business parking can be claimed, as our parking, Congestion Charge and ULEZ guide explains.

If you lease a car instead of buying it, the tax return notes say that for a car leased on or after 6 April 2021 with CO2 emissions over 50g/km, 15% of the hire or rental cost is disallowed. HMRC's manual says this does not apply on the cash basis.

A worked example

A self-employed electrician on the cash basis buys a second-hand petrol car for £15,000 in May 2026. Its CO2 emissions are 120g/km, so it gets the 6% special rate. Running costs are £3,000 for 2026-27, and the car is used 70% for business, which is 8,000 business miles.

Here the flat rate gives the bigger claim. With actual costs, the pool carries £14,100 into the next year (£15,000 less the full £900 allowance), so the allowances continue for as long as the car is kept, as HMRC's manual on part-private assets describes. A new electric car would change this: the 100% first-year allowance gives the business share of the whole price in year one. Your own figures will differ.

What this means for you

The car's price comes off your profit in one go only if it is a new zero-emission or electric car, and then only the business share. The flat rate is simpler to keep, and in our reading it often gives more for a cheaper petrol or diesel car doing high business miles, but the choice lasts as long as you keep the car, so compare both before your first return that includes it. You cannot claim any car costs if you use the £1,000 trading allowance instead of expenses.

Steps to claim your car

1. Keep a log of business journeys: date, from, to, the job and the miles.
2. Keep the purchase invoice and every running cost receipt until you have chosen a method.
3. If you will claim capital allowances, check the car's CO2 emissions, which GOV.UK's business cars page links to.
4. Compare the flat rate with actual costs for the year you bought the car and the years after.
5. Put a flat-rate claim, or the business share of running costs, in box 20, car, van and travel expenses, on the 2025-26 full self-employment pages. Any private or non-business part you include goes in box 35 as well. With turnover under £90,000 you can give one expenses total in box 31 instead.
6. Claim allowances on the car's price in the capital allowances boxes: box 50 for the main rate, box 51 for the special rate and box 52.1 for a zero-emission or electric car, cut by your private use.

The free MTD check shows when Making Tax Digital starts for you, and the trades section has more guides.