UK self-employed: simplified AMAP method vs actual costs
UK sole traders choose between flat-rate AMAPs and the actual-cost method. Comparison.
Two methods, one choice
A UK sole trader (and many partners in partnerships) can deduct vehicle expenses using either:
**A — Simplified flat rate (AMAP-style)**: 45p/mile for the first 10,000 business miles in the basis period, 25p/mile thereafter.[^hmrc-simplified-80] No claim for actual fuel, repairs, insurance, depreciation. Tolls and parking still claimed separately.
**B — Actual costs**: claim the business proportion of every running expense (fuel, repairs, insurance, MOT, road tax) plus capital allowances on the vehicle. Requires a percentage split based on business vs private mileage.
When the simplified method wins
- Lower-mileage sole traders who don't want to track every petrol receipt. - Newer vehicles with high depreciation that would otherwise lock you into capital allowances for years. - Anyone who values time over a few hundred pounds: 95% of sole traders we work with prefer the simplified method.
Once you choose simplified for a vehicle, you must keep it until you stop using that vehicle for business. You can't flip year by year.
When actual costs win
- High-mileage sole traders (>15,000 business miles/year) where actual fuel + maintenance + capital allowances exceeds AMAPs. - Owners of expensive vehicles (>£20,000) where capital allowances at 18% or 6% main pool/special rate are material. - Electric vehicles where the first-year allowance can give a significant tax saving.
Worked comparison
Tom is a freelance designer who drives 12,000 business miles per year in a 2-year-old VW Polo (purchase price £14,000). His total annual miles are 18,000 (so business use is 67%).
**Method A (simplified)**: 10,000 × 45p + 2,000 × 25p = £4,500 + £500 = £5,000.
**Method B (actual)**: - Fuel: £1,800 × 67% = £1,206. - Insurance: £750 × 67% = £502. - MOT + service: £450 × 67% = £301. - Road tax: £165 × 67% = £110. - Capital allowances (18% main pool): £14,000 × 18% × 67% = £1,688. - Total: £3,807.
In Tom's case, simplified wins by £1,193.
Practical record-keeping
For simplified method: just keep a mileage log with date, miles, purpose. That's it. Quilometragem PDF receipts are sufficient.
For actual costs: keep every receipt for fuel, repairs, insurance, plus a complete mileage log to compute the business proportion. Significantly more admin.
VAT (if registered)
If you're VAT-registered, neither method changes how you reclaim input VAT on fuel. You still need fuel VAT receipts and apply Advisory Fuel Rates to compute reclaimable VAT on the business proportion.
Bottom line for 2026
For most UK sole traders driving under 15,000 business miles in a vehicle under £20,000, the simplified method is faster, lower-risk and almost always preferable. Switch to actual costs only if you've modelled the numbers and the gap is meaningful.