Mileage Allowance 2026 in Nottingham: 2026 Update for Local Drivers

The mileage allowance 2026 rate that matters most to Nottingham's private hire and Uber drivers is 55p a mile for your first 10,000 business miles, then 25p a mile after that, for the 2026/27 tax year. This guide explains exactly how to claim it correctly, what changed from the old 45p rate, and how Nottingham City Council's own licensing, low-emission and parking rules interact with your tax return.

Whether you drive for Uber, Bolt, a local private hire operator or hold a Nottingham hackney carriage badge, getting the mileage allowance wrong is one of the most common reasons drivers overpay tax or fall foul of an HMRC check. We cover the correct figures, the local rules specific to Nottingham, and the mistakes to avoid. If you are new to driving in the city, our Nottingham driver hub has wider local guidance alongside this article.

Key takeaways

• The mileage allowance 2026 rate is 55p a mile for the first 10,000 business miles, then 25p a mile, for self-employed drivers in the 2026/27 tax year.
• Nottingham hackney carriage (black cab) drivers cannot use simplified mileage rates and must claim actual costs instead.
• Nottingham has no chargeable Clean Air Zone, but every licensed taxi and private hire vehicle must meet the council's own low-emission conditions.
• The Workplace Parking Levy applies to employers with 11+ spaces, not to a self-employed driver's own car, though it can affect operator costs passed on to you.
• You must keep a detailed, contemporaneous mileage log to support any claim; Uber's own trip history is unlikely to be enough on its own.

What is the mileage allowance?

The mileage allowance is HMRC's flat-rate deduction that lets self-employed drivers claim a fixed amount per business mile instead of tracking every fuel and running cost separately. It is part of HMRC's simplified expenses scheme and, for 2026/27, is set at 55p for the first 10,000 miles and 25p after that.

What changed in the mileage allowance 2026 update?

The mileage allowance 2026 update raised the car and van rate from 45p to 55p a mile for the first 10,000 business miles, backdated to 6 April 2026, the first increase since 2011. According to HMRC's simplified expenses guidance, the rate above 10,000 miles stayed at 25p a mile, and the flat rates for motorcycles (24p) and bicycles (20p) were unchanged.

For a driver already covering high daily mileage, the increase is significant. On 12,000 business miles a year, the old 45p/25p structure gave a deduction of £5,000. Under the new 55p/25p rates that rises to £6,000, a full £1,000 more coming off your taxable profit before tax and Class 4 National Insurance are worked out.

Why the rate had not changed since 2011

The 45p rate was fixed in 2011 and never moved despite fuel, insurance and vehicle running costs rising steadily. Drivers' groups had argued for years that the old rate no longer reflected real running costs, and the 2026 change was the government's first response to that pressure.

Which vehicles qualify for the mileage allowance in Nottingham?

Simplified mileage rates apply to ordinary cars and vans used for self-employed work, but they specifically exclude vehicles designed for commercial use, which includes hackney carriages and black cabs. Uber, Bolt and standard private hire vehicles registered as ordinary cars qualify; a Nottingham City Council-licensed hackney carriage does not.

Private hire vehicles

If you drive a standard car under a Nottingham City Council combined hackney carriage and private hire driver licence, but the vehicle itself is licensed as private hire rather than hackney carriage, you can normally use the simplified mileage rate. Check your specific vehicle licence type with the council if you are unsure.

Hackney carriages and black cabs

Black cab and hackney carriage drivers cannot use the flat mileage rate at all and must instead claim actual expenses: fuel, servicing, insurance, repairs and capital allowances on the vehicle. This means detailed receipts matter even more, since every cost has to be individually justified rather than covered by a flat per-mile figure.

How do I claim the mileage allowance on my tax return?

You claim the mileage allowance by multiplying your total qualifying business miles for the tax year by the relevant rate and entering the result as a vehicle expense on the self-employment pages of your Self Assessment return. You choose simplified expenses instead of actual costs, and once chosen for a vehicle you must generally stick with that method for as long as you use that car for business.

1. Keep a mileage log for every business trip: date, start point, end point, purpose and miles driven.
2. Add up total qualifying business miles for the whole 2026/27 tax year, or use our mileage calculator to total them.
3. Apply 55p to the first 10,000 miles, then 25p to any miles above that.
4. Enter the total as your vehicle expense figure on the self-employment section of your Self Assessment return.
5. Keep supporting records, including trip exports from Uber or Bolt, for at least five years after the 31 January 2027 filing deadline.

What counts as a business mile for Uber and private hire drivers?

A business mile is any journey made wholly for the purpose of your driving work, including trips with a passenger, driving to a pickup after accepting a booking, and repositioning between jobs while logged into the app. Ordinary commuting from home to a fixed base does not count, but for most app-based drivers who start and end trips from home, nearly all driving time while working is treated as business mileage.

Journeys that do qualify

Trips carrying a fare, driving to accept a booking, positioning yourself in a busier area while logged into the app, and journeys to collect or drop off a vehicle for servicing all count as business mileage, provided they are genuinely part of your driving work rather than personal errands.

Journeys that don't qualify

Personal shopping trips, the school run, or driving purely for pleasure with the app switched off are not business mileage, even if you happen to be in the car you use for driving work. Mixing personal and business use on the same trip means only the business-related portion can be claimed.

Simplified mileage rate vs actual costs: which is better?

For most Uber and private hire drivers the simplified mileage rate is better, since it is far simpler to administer and usually beats actual running costs on a typical mid-range car. Hackney carriage drivers have no choice, since they must use actual costs, while higher-mileage drivers in expensive vehicles may find actual costs works out higher instead.

Most Uber and Bolt drivers with an older or mid-range car do better on the flat mileage rate, because it is simple and tends to outpace actual running costs on a typical private hire vehicle. Drivers with a newer, more expensive car, or a hackney carriage, are more likely to benefit from, or be required to use, the actual costs method instead. If you drive through a limited company rather than as a sole trader, see our guide on mileage allowance for limited company drivers for the different rates that apply.

Illustrative example: calculating a Nottingham driver's claim

This illustrative example uses an invented driver, Priya, who drives a private hire vehicle for Uber and a local Nottingham operator throughout the 2026/27 tax year. Priya recorded 14,500 business miles across the year using a trip log backed by her Uber app history.

Priya's first 10,000 miles qualify for the 55p rate, giving £5,500. Her remaining 4,500 miles qualify for the 25p rate, giving £1,125. Her total mileage allowance deduction for the year is £6,625, which she enters as her vehicle expense figure when she completes her Self Assessment return by 31 January 2027.

How does Nottingham's Clean Air Zone status affect drivers?

Nottingham does not currently operate a chargeable Clean Air Zone, so there is no daily entry charge for driving an older or higher-emission vehicle in the city centre. The council instead reduced pollution through other measures, including retrofitting buses and requiring low-emission standards for licensed taxis and private hire vehicles, avoiding a separate CAZ charge for drivers.

This matters for your tax planning because, unlike drivers in cities with an active CAZ, you are not budgeting for a daily zone charge. However, Nottingham City Council's own vehicle licensing conditions still set emissions and age standards for licensed vehicles, so check the current requirements on the council's taxi vehicle requirements page before buying or leasing a car for private hire work.

Does the Nottingham Workplace Parking Levy affect Uber drivers?

The Workplace Parking Levy applies only to employers providing 11 or more workplace parking spaces, currently charged at £592 per space for the 2026/27 licensing year, so it does not apply directly to a self-employed driver parking their own car at home. It can still reach you indirectly if your operator or a depot you use passes on parking costs, so it is worth checking your operator agreement for any related charge.

The levy has funded Nottingham's tram extensions and bus improvements since 2012 and is one of the reasons the city has avoided a separate Clean Air Zone charge. It is not a cost most individual private hire or Uber drivers pay directly, but any parking fee your operator passes on to you as a business cost may itself be deductible, so keep the invoice.

What licensing rules apply to Nottingham private hire and Uber drivers?

Nottingham City Council issues a combined hackney carriage and private hire driver licence, meaning most drivers licensed by the council can legally accept both private hire bookings and, where applicable, hackney carriage work. Applicants must be at least 18, hold a full British driving licence for at least a year, provide two character references, and pass the council's local topography knowledge test.

Licence and DBS costs are allowable expenses

The fees you pay Nottingham City Council for your driver licence, vehicle licence, DBS check and the topography test are all allowable business expenses, separate from your mileage claim. Keep the council's payment confirmations and receipts, since these reduce your taxable profit in addition to your mileage deduction.

Operator licences and working through a platform

Private hire drivers in Nottingham must always work through a licensed operator, and Uber and Bolt hold operator licences that allow them to dispatch bookings to council-licensed drivers. Any commission or subscription fee you pay to your operator or platform is also a deductible business expense against your driving income.

Common mileage allowance mistakes Nottingham drivers make

The most frequent errors are claiming personal journeys as business mileage, double-claiming fuel costs on top of the flat rate, and failing to keep a proper log. Each carries a real cost if HMRC opens a compliance check on your return.

Claiming fuel, servicing or insurance receipts as well as the mileage rate is not allowed, since the flat rate already covers those costs; doing so risks HMRC disallowing the duplicated claim and charging extra tax plus interest. A careless inaccuracy on a return can also trigger a penalty of up to 30% of the extra tax due under HMRC's penalties for inaccuracies factsheet, rising higher for deliberate errors, so accuracy matters more than optimism.

Black cab drivers who mistakenly use the simplified mileage rate instead of actual costs face having the whole claim recalculated, often at a worse result once HMRC insists on the correct method. Switching between simplified and actual costs method for the same vehicle partway through ownership without a valid reason is another common trigger for a query from HMRC.

How Uber Driver Accountant helps

Uber Driver Accountant is a fixed-fee accountancy service built specifically for Uber, Bolt, private hire and black cab drivers, independent of Uber and Bolt themselves. Fees start from £20 a month, and we handle your mileage records, Self Assessment return, and any HMRC correspondence so your claim is accurate and defensible. See our pricing for the full fixed-fee list.

We know Nottingham's licensing rules, the hackney carriage exclusion from simplified mileage, and how to keep your record-keeping tight enough to survive a compliance check. See our personal tax service for full Self Assessment support, or our Making Tax Digital service if your income means MTD for Income Tax applies to you from April 2026. Manchester drivers can compare notes in our car mileage allowance Manchester guide.

Key terms

• AMAP: Approved Mileage Allowance Payment, HMRC's tax-free rate for business mileage.
• Simplified expenses: HMRC's flat-rate system for claiming vehicle, home and other costs instead of tracking every receipt.
• MTD: Making Tax Digital, HMRC's digital record-keeping and quarterly reporting system, due from 6 April 2026 for qualifying income over £50,000.
• POA: Payments on account, advance payments toward next year's tax bill, usually due 31 January and 31 July.
• UTR: Unique Taxpayer Reference, the 10-digit number HMRC uses to identify your Self Assessment record.
• NIC: National Insurance Contributions; self-employed drivers pay Class 4 NIC on profits above the relevant threshold.

Conclusion

The mileage allowance 2026 rate of 55p, then 25p, is worth significantly more to Nottingham's Uber and private hire drivers than the old 45p rate, but only if you claim it correctly and keep the records to back it up. Hackney carriage drivers need to remember the exclusion, and every driver should factor in Nottingham's own licensing costs and lack of a Clean Air Zone charge when planning their year.

If you would like a fixed-fee accountant who already understands Nottingham's taxi and private hire rules, contact Uber Driver Accountant for a straightforward conversation about your return.

Last reviewed 23 September 2026 by the Uber Driver Accountant tax team.

This article is general information, not personal tax advice. Every driver's circumstances differ, so speak to a qualified accountant before relying on any figure here, and seek professional representation if HMRC opens a dispute or raises a penalty on your return.