You can claim vehicle tax on your Self Assessment return if you are self-employed and use the vehicle for business, but only when you use the actual costs method. Vehicle Excise Duty (VED) is listed by HMRC as an allowable running cost alongside fuel, insurance, repairs, and servicing.1GOV.UK. Expenses if You’re Self-Employed You deduct the business-use share, not the whole bill. If you use simplified mileage expenses instead, vehicle tax is already built into the flat rate per mile and cannot be claimed separately.
What Counts as Business Use
Every expense you claim has to be spent wholly and exclusively for your trade. That test sits in Section 34 of the Income Tax (Trading and Other Income) Act 2005 and it governs vehicle tax the same way it governs everything else on your return.2Legislation.gov.uk. Income Tax (Trading and Other Income) Act 2005 – Section 34
Business travel means journeys with a genuine work purpose: visits to clients, trips to a temporary work site, collecting supplies, or meetings away from your usual base. Driving from home to a regular, permanent workplace is commuting and does not qualify, even if you take calls on the way. If you genuinely work from home and that is your main business base, journeys from there to client sites or temporary workplaces can count.
Most vehicles do double duty. To handle that, track your total mileage for the year and your business mileage, then apply the business percentage across every running cost. If the vehicle is used 70% for business, 70% of each running cost, including VED, is deductible. HMRC expects the split to reflect what actually happened, not a comfortable estimate.
How to Claim Vehicle Tax Under Actual Costs
Under the actual costs method you total every running cost for the year, including your VED payment, and apply your business-use percentage to the total. HMRC’s own list of allowable expenses for the self-employed names vehicle licence fees alongside fuel, insurance, repairs, servicing, parking, and breakdown cover.1GOV.UK. Expenses if You’re Self-Employed
A worked example: your VED for the year is £190 and you use the vehicle 60% for business. You claim £114. The same 60% applies to your fuel, insurance, servicing, and every other running cost. Keep the percentage consistent from year to year, and only change it if your actual usage pattern changes.
On the return itself, vehicle running costs go into Box 20 of the SA103F (full self-employment pages), labelled “Car, van and travel expenses.” HMRC’s notes for that box explicitly cover car and van insurance, repairs, servicing, fuel, parking, hire charges, vehicle licence fees, and travel fares.3HM Revenue & Customs. SA103F Notes – Self-Employment (Full) If your turnover is below £90,000 you can use the SA103S short pages instead.4HM Revenue & Customs. SA103S Notes – Self-Employment (Short) You enter one consolidated figure for vehicle and travel costs; capital allowances on the vehicle purchase go elsewhere on the return.
Why Simplified Mileage Blocks a Separate Vehicle Tax Claim
Simplified expenses replace individual cost tracking with a flat rate per business mile. For the 2025/26 tax year, cars and vans were 45p per mile for the first 10,000 business miles and 25p thereafter. From 6 April 2026, the rate for the first 10,000 miles rises to 55p, with 25p continuing above that. Motorcycles have their own flat rate of 24p per mile.
These rates are designed to cover the whole running-cost picture: fuel, insurance, repairs, servicing, and vehicle tax. Because VED is already baked in, you cannot enter it again as a separate expense. You also cannot claim capital allowances on a vehicle you are running through the mileage method. If the mileage rate produces the bigger deduction for your usage, that is the trade-off you accept in exchange for the simpler paperwork.
The Method Choice Locks In
Once you have claimed capital allowances on a vehicle under the actual costs method, you cannot later switch that vehicle to simplified mileage expenses.5GOV.UK. Claim Capital Allowances – Business Cars The lock works in one direction. Starting on simplified expenses does not stop you moving to actual costs when you buy a new vehicle, but going back the other way on the same car is not available.
This matters before you file the first return covering a new vehicle. Run both calculations, decide which one suits your usage and running costs, and stick with it for the life of that vehicle in your business.
Records to Keep for a VED Claim
HMRC requires self-employed individuals to keep records for at least five years from the 31 January following the tax year the return relates to.6GOV.UK. A General Guide to Keeping Records for Your Tax Returns For the 2025/26 tax year, hold your records until at least 31 January 2032.
If you are on the actual costs method, keep proof of every running cost: fuel receipts or statements, insurance schedules, repair invoices, breakdown cover, and your VED payment confirmation. If your VED receipt goes missing, payment details can usually be retrieved through the DVLA’s online services. Keep a mileage record too, showing total and business miles, so your business-use percentage can be justified. HMRC’s guidance says it is usually enough to keep a record of business and private mileage and split running costs in the same proportions.6GOV.UK. A General Guide to Keeping Records for Your Tax Returns
On simplified expenses, the mileage log is the whole record. Note the date, destination, business reason, and distance for each trip. A weekly summary is acceptable. Vague entries like “various client meetings” will not hold up if HMRC opens an enquiry, so use real names and destinations.
Filing Deadlines
For the 2025/26 tax year, ending 5 April 2026, paper returns are due by 31 October 2026. Online returns and any tax owed are due by 31 January 2027. The second payment on account, if you make them, is due by 31 July 2027.7GOV.UK. Self Assessment Tax Returns – Deadlines
Late filing triggers an automatic £100 penalty and further charges accumulate the longer the return stays outstanding. Errors can also lead to penalties calculated as a percentage of the tax underpaid, with higher rates for deliberate inaccuracies than for careless ones.
Which Method Leaves You Better Off
Actual costs tends to win when your vehicle expenses are heavy relative to your mileage. High insurance, expensive repairs, or a vehicle with steep VED all push the maths that way. It is also the only route that lets you claim capital allowances on the purchase price of the vehicle itself, which is a separate deduction from running costs.
Simplified expenses suit moderate mileage in a relatively cheap-to-run vehicle. The calculation is straightforward and the receipts pile is smaller. At 55p per mile for the first 10,000 business miles from April 2026, a sole trader driving 8,000 business miles claims £4,400 without keeping a single fuel receipt.
Run the numbers both ways before your first return on a new vehicle. Vehicle tax is only ever a separate line item under actual costs, and the choice you make on that first return follows the vehicle for as long as you use it in the business.