Car Mileage Allowance for Manchester Drivers: 55p a Mile in 2026/27

Your car mileage allowance as a self-employed driver in Manchester is 55p a mile for the first 10,000 business miles in the 2026/27 tax year, then 25p a mile after that. It replaces fuel, insurance, servicing and wear with one flat figure, and it is the same rate in Salford, Stockport, Bolton or anywhere else in the UK. This guide shows how the allowance works for private hire drivers licensed in Greater Manchester, who cannot use it, and how to keep the records HMRC (His Majesty's Revenue and Customs) expects.

Greater Manchester is ten boroughs rather than one city, so many drivers are licensed by one council and work across several. That makes a tidy log more important than in a single-city area. We also cover what the Clean Air Plan means for your costs, because it affects whether the mileage rate or actual costs suits your car better.

Key takeaways

• For 2026/27 the simplified rate is 55p a mile for the first 10,000 business miles and 25p a mile after that, according to GOV.UK's simplified expenses vehicle page.
• Most private hire saloon cars qualify, but cars designed for commercial use, such as black cabs and hackney carriages, do not.
• You cannot use the flat rate for a car if you have already claimed capital allowances on it or put its costs into your expenses. Once you choose flat rates for a vehicle, you keep using them while you use that car for the business.
• Greater Manchester has no charging Clean Air Zone, according to the Clean Air Greater Manchester plan, so there is no daily charge to include in your costs.
• A contemporaneous mileage log is what makes any claim safe. Our mileage calculator shows the sum in seconds.

What is car mileage allowance?

Car mileage allowance is a flat rate per business mile that a self-employed person deducts from their profits instead of working out fuel, insurance, repairs and depreciation separately. HMRC calls it a simplified expenses vehicle flat rate. You multiply your business miles by the set rate and claim the result.

What is the HMRC mileage rate for 2026/27?

The HMRC mileage rate for 2026/27 is 55p a mile for the first 10,000 business miles in the tax year and 25p a mile for every business mile after that. Motorcycles are 24p a mile. These figures come from GOV.UK and apply from 6 April 2026 to 5 April 2027.

According to HMRC's guidance on simplified expenses for vehicles, the higher rate applies to the first 10,000 miles of the tax year, not to each month. The 10,000-mile band is counted per vehicle, and it restarts on 6 April every year.

Before 6 April 2026, cars were on a lower first-band rate. If you drove any business miles earlier in the year, check which rate applied on the day you drove them. Your tax software or accountant should split the mileage by tax year.

Can a private hire driver use the simplified mileage rate?

Yes, in most cases. If you drive an ordinary saloon or hatchback licensed as a private hire vehicle (PHV), it counts as a car for simplified expenses. GOV.UK excludes cars designed for commercial use, such as black cabs and hackney carriages, so a purpose-built taxi cannot use the flat rate.

That distinction matters in Greater Manchester, where both hackney carriages and PHVs are licensed. If you drive a purpose-built black cab, you claim actual costs and capital allowances instead. If you are unsure which category your vehicle falls into, check with your licensing council and with an accountant before you file.

What is the 10,000-mile band and why does it matter?

The 10,000-mile band is the point where the rate drops from 55p to 25p a mile. Every business mile up to 10,000 in the tax year earns 55p, and each mile beyond it earns 25p. Full-time drivers often pass 10,000 miles in a few months, so the lower rate applies to most of their year.

Because the band is annual, your claim does not rise in a straight line. The first 10,000 miles produce £5,500. A driver covering 25,000 business miles claims £5,500 plus 15,000 miles at 25p, which is £3,750, giving £9,250 in total.

When you cannot use simplified mileage

You cannot use the flat rate for a vehicle if you have already claimed capital allowances on it, or if you have put its running costs into your business expenses. The vehicle must also be eligible. GOV.UK sets out these limits on its vehicles page, and you should read them before choosing a method.

• You bought the car outright and claimed the full cost, or a share of it, as capital allowances.
• You have already claimed fuel, insurance, repairs or a similar cost for that car as an expense.
• The vehicle is a black cab, hackney carriage or another car designed for commercial use.
• You want to switch back to actual costs after choosing the flat rate for the same car.

The last point catches many drivers out. GOV.UK says that once you use the flat rates for a vehicle, you must keep using them for as long as that vehicle is in the business. You do not have to use flat rates for every vehicle you own, only to be consistent for each one.

Should I claim mileage or actual running costs?

It depends on your car and how many miles you drive. Older, reliable, cheaper cars tend to do better on the mileage rate, because the flat figure exceeds their true running cost. Newer, expensive or very high-mileage cars can do better on actual costs plus capital allowances.

Under actual costs, you claim the business share of fuel, insurance, servicing, repairs and road tax. You can also claim capital allowances on the purchase, as GOV.UK explains for vehicle expenses. You must split the costs between business and private use, so a mileage log is needed either way.

Because the choice is hard to reverse for the same car, work out both methods for your first year. Our guide to allowable expenses for Uber drivers covers the other costs you can claim with either method, such as phone, licensing fees and platform charges. GOV.UK says parking and other travel expenses can be claimed on top of your vehicle expenses.

How do I work out my mileage claim? A step-by-step method

You add up your business miles for the tax year, apply 55p to the first 10,000, apply 25p to the rest, and enter the total as the vehicle expense on your Self Assessment return. The steps below keep the claim accurate and easy to defend if HMRC asks questions.

1. Check your car is eligible and that you have not claimed capital allowances or running costs on it.
2. Record every business trip as it happens: date, start and end, purpose and miles.
3. Record your odometer reading on 6 April and 5 April, so you can work out total miles and the private share.
4. Add up business miles for the year, and separate the ones before and after 10,000.
5. Multiply the first 10,000 by 55p and the remainder by 25p, and add the two together.
6. Enter the total on your return, and keep your log safe, because HMRC can ask to see it. Check GOV.UK for how long to keep records.

Our personal tax service can prepare the return for you, and our guide to mileage logs and bookkeeping explains what an HMRC-proof record looks like.

What counts as a business mile in Greater Manchester?

A business mile is any mile driven to earn your income: with a passenger on board, driving to a pickup you have accepted, or driving to a job-related appointment. Your normal commute does not count if you work from home, but there are exceptions for waiting between jobs and driving to a temporary base.

• Trips with a passenger, whichever borough the pickup or drop-off is in.
• Driving from a drop-off to the next accepted pickup.
• Driving to a vehicle inspection, a licensing test or a compliance appointment.
• Trips to buy business supplies, or to the garage for a business repair.

Private miles do not count. That includes the school run, shopping, a holiday and personal visits. The best log records the private miles too, because it lets you show that the business share is honest.

Do trips across Greater Manchester boroughs need separate records?

No. HMRC wants your business journeys separated from your private ones, not separated by council area. A business trip from Bolton to Stockport counts the same as one inside Manchester, and the flat rate does not vary by borough. Your licence limits where you may accept bookings, not how you claim tax.

Greater Manchester's ten councils each license their own drivers, with common minimum standards developed together with Transport for Greater Manchester (TfGM). That is a licensing matter. A licence from one authority does not change your tax, and you should check the conditions on your own licence before working outside your area.

How does the Greater Manchester Clean Air Plan affect drivers?

Greater Manchester does not have a charging Clean Air Zone. The Clean Air Greater Manchester website states that there are no clean air charges to drive anywhere in Greater Manchester. That means no daily charge in your expenses, though the plan does affect vehicle standards and support funding.

According to the Clean Air Greater Manchester plan, the investment-led approach includes an £8 million Hackney Support Fund for black cabs, with grants of up to £12,560, and a £2 million Private Hire Vehicle Support Fund for owners licensed by a Greater Manchester council. Funding terms change, so check the site for the current offer before you buy or upgrade a car.

The plan matters for tax in one way. If you buy a cleaner car with a grant, the purchase cost and how any grant is treated should be looked at before you choose actual costs or the mileage rate. Ask us before you finance a car, because capital allowances on it rule out the flat rate for that vehicle.

Common mistakes, and the penalty each one can trigger

• Claiming mileage and fuel on the same car. This double-counts a cost. An inaccurate return can lead to extra tax, interest and a penalty, depending on whether HMRC sees the error as careless or deliberate.
• Using the flat rate on a car with capital allowances. The claim is wrong, and HMRC can reverse it and charge interest on the unpaid tax.
• Estimating mileage at the end of the year. A weak record makes the whole claim hard to defend, and a deliberate overclaim can attract much heavier penalties.
• Counting private or commuting trips as business miles. This overstates your claim and can lead to a penalty for an inaccurate return.
• Forgetting the 10,000-mile switch to 25p. Applying 55p to every mile overstates your deduction, and the extra tax and a penalty can follow.
• Filing late. Filing or paying late after 31 January 2027 can trigger late-filing and late-payment penalties. See GOV.UK's Self Assessment guidance for the current position.

If HMRC opens an enquiry into your mileage, get professional representation early. Our HMRC support service can handle the correspondence and the workings.

Illustrative example: a Manchester private hire driver

This is an illustrative example using an invented driver and invented figures. A private hire driver licensed by a Greater Manchester council drives a 2019 saloon. They have not claimed capital allowances on it. In 2026/27 they drive 18,000 miles in total, of which 15,000 are business miles.

• First 10,000 business miles at 55p: £5,500.
• Remaining 5,000 business miles at 25p: £1,250.
• Total simplified mileage claim: £6,750.
• Private miles: 3,000 (17% of the total), correctly left out of the claim.

Now suppose the same driver's actual costs for the year are £5,400 for the whole car: fuel, insurance, servicing, tyres and road tax. The business share at 83% is about £4,480, before any capital allowances. In this invented case the simplified rate gives a larger deduction. For a newer car with heavy depreciation, the result could go the other way, which is why we compare both.

What if I run a limited company instead?

If you drive through your own limited company, the rules differ. The company reimburses you for business miles, and the mileage rates for employees' own cars are used instead of the self-employed flat rate. We cover this in mileage allowance for a limited company driver, and the Manchester page lists what we do locally.

Key terms

• HMRC: His Majesty's Revenue and Customs, the UK tax authority.
• PHV: private hire vehicle, licensed by a local council, booked in advance rather than hailed.
• Hackney carriage: a licensed taxi that can be hailed in the street, often a purpose-built black cab.
• Capital allowances: tax relief on the cost of buying equipment or a vehicle for your business.
• Simplified expenses: HMRC's flat-rate method for vehicles, working from home and living at business premises. See GOV.UK.
• Business mile: a mile driven to earn your income, as opposed to a private or commuting mile.
• TfGM: Transport for Greater Manchester, which supports the ten councils on common licensing standards.

How Uber Driver Accountant helps

We work with drivers only, on fixed fees from £20 a month, and we are independent of Uber and Bolt. We compare mileage against actual costs for your car, check your log, and file your return, with no surprise bills. See our personal tax service and pricing for details.

Our key dates guide, key tax dates for Uber drivers, also helps you plan around the 31 January filing deadline.

Conclusion

For 2026/27, the car mileage allowance is 55p a mile for the first 10,000 business miles and 25p a mile after that, provided your car is eligible and you have not claimed capital allowances on it. In Greater Manchester, borough boundaries do not change the rate, and there is no charging Clean Air Zone to plan for. The one thing that protects your claim is a good log. Contact us for a fixed-fee quote, and we will compare both methods for your car.

Last reviewed 19 September 2026 by the Uber Driver Accountant tax team.

This article is general information and is not personal tax advice. Speak to a qualified accountant about your own circumstances, and take professional representation if HMRC disputes a claim or raises a penalty.