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Van capital allowances vs mileage calculator

For sole traders buying a van: compare claiming the van's cost plus running costs with HMRC's flat mileage rate over the time you'll keep it. The choice sticks for that vehicle, so it's worth running the numbers first.

The two ways to claim

Flat rate. Sole traders and partnerships with no company partners can claim 55p a mile for the first 10,000 business miles in 2026 to 2027, then 25p, instead of the van's actual costs. You can't use it for a vehicle you've already claimed capital allowances on, and once you use it for a vehicle you must stick with it for that vehicle (GOV.UK).

Actual costs. Claim the business share of the running costs each year, plus the van itself. Vans aren't cars for capital allowances, so they qualify for the annual investment allowance, which lets you deduct the full value from profits in the year you buy, up to £1 million (GOV.UK, AIA). If you sell an item you've claimed AIA on, you may need to pay tax on the sale. If you use the cash basis, you can only claim capital allowances on cars, so a van's cost is claimed as an expense instead (GOV.UK). Either way, the van's cost is relieved roughly when you buy it.

Double cab pick-ups

For purchases from 6 April 2025 (1 April for companies), HMRC treats most double cab pick-ups as cars, whatever their payload, so they don't get the annual investment allowance. Car rates are 14% a year from April 2026 (18% before), or 6% for higher-emission cars (HMRC manual CA23511, GOV.UK). This calculator assumes a van.

Reading the result

High mileage in a cheap, efficient van tends to favour the flat rate; an expensive van, or low mileage with high running costs, tends to favour actual costs. The year-1 claim under actual costs is front-loaded, which helps cash flow in the year you buy. Because the choice is locked in for that vehicle, check with an accountant if the difference is small.

See the mileage allowance calculator for a single year, van costs for sole traders for lease, buy and finance options, and the self-employed tax calculator for your bill.

Based on GOV.UK and HMRC guidance, checked 15 October 2026. An estimate, not tax advice.

Questions

Can I claim the full cost of a van in the first year?

Usually yes. Vans qualify for the annual investment allowance (up to £1 million), or under the cash basis the cost is an expense. Claim only the business-use share.

Can I switch from capital allowances to mileage?

Not for the same vehicle. You can't use the flat rate for a vehicle you've claimed capital allowances on, and once you use the flat rate you stick with it.

Is a double cab pick-up a van for tax?

For purchases from 6 April 2025, HMRC treats most double cab pick-ups as cars for capital allowances, so they don't get the AIA.

What is the mileage rate for vans in 2026 to 2027?

55p a mile for the first 10,000 business miles, then 25p, for sole traders using simplified expenses.