Landlords and mileage: why where you run the business from decides the claim

Most mileage guidance is written for employees and sole traders. Landlords sit slightly to one side of both, and a lot of them either claim nothing for driving to their properties or claim everything without asking whether it counts. The rules are not complicated, but one question decides almost every claim: where is the business run from?

Landlords can use the flat rate

Since the 2017/18 tax year, unincorporated landlords (individuals and partnerships of individuals letting property) can choose a fixed rate mileage deduction instead of working out the actual costs of running the car. The deduction comes off your rental profit, so what it saves you is your Income Tax rate on it, not the full amount. The rates are the same ones sole traders use:

The 55p rate applies for 2026/27. For 2025/26 and earlier the first band was 45p. If your property accounts do not run to 5 April, HMRC's guidance explains how to handle a period that straddles the change. The 10,000 miles count across all the cars and vans the business uses the flat rate for.

There is one important condition. The flat rate is not available for a vehicle you have already claimed capital allowances on (or, for a van, whose purchase cost you deducted under the cash basis). If you bought the car through the property business and claimed allowances on it, you stay with actual costs for that car. (There was a one-off transitional exception in 2017 for vehicles first claimed on from 2013/14. For most landlords the practical rule is simple: once you have claimed allowances on a car, the flat rate is off the table for it.) It works the other way too: once you use the flat rate for a vehicle, you keep using it for as long as that vehicle is used in the business.

Limited companies that hold property cannot use the flat rate for their own vehicles. A director driving their own car on company business is a different arrangement, covered in directors claiming mileage.

The test every journey has to pass

The same principle runs through all property income: a cost is only deductible if it is incurred wholly and exclusively for the purposes of the property business.

For a journey, that means the purpose of the trip has to be the business. A drive to the flat to let in a plumber, meet a new tenant, carry out an inspection or collect keys from an agent passes. A trip to the city where the flat happens to be, to see family, with a quick look at the property while you are there, does not. HMRC's own guidance uses almost exactly that example: a journey with a dual purpose is not deductible. Your stated purpose counts, but it is not decisive if you or your family get a substantial private benefit from the trip.

Incidental personal benefit does not spoil an otherwise business journey. Stopping on the way for a newspaper or a coffee is fine. Turning the trip into a day out is not.

Where the business is based

This is the part landlords most often miss. Travel between properties, solely for the business, is allowable. Travel from home to a property is only allowable if the journey is exclusively for the business, and in practice that depends on where the business is actually run from. That is a question of fact.

If you manage the lettings yourself from home, keeping the records, dealing with tenants and arranging repairs, and there is no office outside the home, HMRC normally accepts home is the business base. The drive from there to a property to deal with something is then a business journey.

If a letting agent runs the properties day to day, HMRC's guidance (PIM2220) is direct: where the agent carries out all or virtually all of the letting duties, the business is likely to be conducted through the agent, the business base is likely to be the agent's office, and travel from your home will not normally be allowable. If you still do a real share of the management yourself from home, the answer depends on how much, which is a question of fact.

If you have a separate office for the property business, that office is the base. HMRC's guidance says journeys from home to that office, or from home to the properties, are not allowable; journeys from the office to the properties and between properties can be. Occasionally taking work home does not change that.

The journeys, resolved

That last row is worth pausing on. Running costs of an existing letting business are deductible against rent. Costs that relate to buying a new property are generally capital, so not deductible against rent. Whether any of your own travel counts towards the property's cost for Capital Gains Tax is a separate and narrower question, and not one to assume. Keeping those trips separate in your records lets them be treated properly either way.

Flat rate or actual costs

The flat rate covers fuel, insurance, servicing, repairs, road tax and depreciation. None of those can be added on top. Tolls, congestion charges and parking on a business journey are not part of the mileage rate and can be deducted separately.

The alternative is to deduct the business share of actual running costs, plus capital allowances on the business share of the car, which needs every receipt and a reliable business percentage. The flat rate is simpler to administer. Which gives the larger deduction depends on the car's cost, its running costs and the business mileage, and because the choice sticks to the vehicle, the comparison is over the whole time you expect to use it.

One more choice sits above both: the £1,000 property allowance. You can deduct up to £1,000 from your gross rental income instead of your actual expenses, but you then cannot deduct expenses, mileage included, as well. The choice is made each tax year, and the allowance gives the larger deduction only when your allowable expenses, mileage included, come to less than £1,000. It is not available in some cases, for example if you claim the tax reduction for mortgage interest on a residential let.

What the record needs to show

Because the whole claim rests on purpose, the log has to show more than distance. For each trip, record:

• The date
• Where you started and where you went, including which property
• The reason, in a few words: "boiler service, flat 2", "check-in, new tenancy"
• The miles

A log reconstructed in January from memory is exactly the kind that struggles if HMRC asks. A contemporaneous one, written on the day, is easy to defend.

Milometry records each journey automatically. Save each property as a location and an inspection round arrives as separate journeys you can recognise at a glance, mark as business and annotate with the reason. The claim is totalled per tax year, with progress towards the 10,000 mile threshold shown as you go.

Sources

• Property Income Manual PIM2220: travel expenses (HMRC)
• Business Income Manual BIM75005: simplified expenses, motor vehicles (HMRC)
• Simplified expenses if you're self-employed: vehicles (HMRC)
• Income Tax (Trading and Other Income) Act 2005, section 94E: excluded vehicles (legislation.gov.uk)
• Income Tax (Trading and Other Income) Act 2005, section 94F: the mileage rates (legislation.gov.uk)
• Work out your rental income when you let property (HMRC)
• Tax-free allowances on property and trading income (HMRC)

General information for UK landlords, not legal or tax advice. Where your business is based and what a journey was for are questions of fact: if you are relying on a large claim, get it confirmed.