If you’re self-employed and use a car or van for work, it’s normal to wonder whether repair bills, servicing costs, and other running expenses can be claimed against tax.
In many cases, yes. But it depends on how you claim your vehicle costs.
If you use HMRC’s mileage allowance method, you cannot also claim repairs, servicing, or insurance separately.
If you use the actual cost method, you can usually claim the business share of those costs instead.
We explain more in this guide.
Can sole traders claim car or van repair costs?
Yes, sometimes.
Sole traders can usually claim vehicle repair and running costs as business expenses, but only if they use the actual cost method for that vehicle.
If you use the mileage allowance method, you cannot separately claim things like:
- repairs
- servicing
- tyres
- MOT costs
- fuel
- insurance
That is because HMRC’s mileage rate is designed to cover the general costs of running the vehicle.
If you are not sure how the mileage method works, see our guide to mileage allowance for sole traders.
Why the method you use matters
When a sole trader uses a car or van for business, there are broadly two ways to deal with vehicle costs.
1. Mileage allowance method
This is the simplest way to cover your vehicle-related expenses. Just keep a record of the miles you cover for business, and claim the HMRC approved mileage rate.
If you use this method, you do not then add separate claims for repairs or other normal running costs, as these costs have already been factored into the mileage rate.
2. Actual cost method
Under this approach, you calculate the vehicle’s true cost and claim the business proportion of the expense.
That may include repair bills, servicing, insurance, breakdown cover, fuel, and other running costs, depending on the circumstances.
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This is where repair costs become relevant.
What vehicle running costs can usually be claimed?
If you use the actual cost method, allowable vehicle running costs may include:
- repairs and servicing
- replacement tyres
- MOT test fees
- breakdown cover
- vehicle insurance
- fuel
- road tax
- lease or hire charges, where applicable
However, if the vehicle is used for both business and private journeys, you can normally only claim the business-use proportion.
For example, if you estimate that 60% of the vehicle’s use is for business, you would usually only claim 60% of the allowable running costs.
Repairs versus improvements
There is an important distinction between repairs and improvements, as their tax treatment differs.
Routine repair and maintenance costs are usually treated differently from spending that significantly improves the vehicle.
Repairs and maintenance are more likely to be allowable revenue expenses. Examples might include:
- fixing brakes
- replacing a worn clutch
- new tyres
- routine servicing
- bodywork repairs after wear and tear
But if you spend money improving the vehicle beyond simple repair, that may not be treated as a normal running expense. In some cases, it may fall into capital expenditure instead.
For more on that side of the rules, see our guide to capital allowances for sole traders.
What about fuel costs?
The same logic applies to fuel costs.
If you use the mileage method, fuel is already covered by the mileage rate. You cannot claim fuel separately as well.
If you use actual costs, you may normally claim the business share of fuel costs instead.
The same principle applies to several other travel-related costs, although some have their own treatment.
You can also read our related guides on parking, tolls and congestion charges and subsistence expenses.
Can you claim 100% of the repair bill?
Only if the vehicle is used entirely for business.
For many sole traders, especially those using one vehicle for both work and private life, that will not be the case. Where there is mixed use, you normally need to make a fair and reasonable adjustment.
That means keeping enough records to support the percentage you use in your accounts.
Cars and vans: is there a difference?
The basic principle is similar for both cars and vans. If the vehicle is used in the business and you are claiming actual costs, the business share of repair and running costs is usually the amount that matters.
In practice, vans are often easier to deal with because they are used more heavily for business and have less private use than a typical family car. But the same broad tax logic still applies: only the business element is normally claimable.
What you cannot usually claim
Even where vehicle costs are relevant to the business, some costs may still be disallowed or restricted.
Common problem areas include:
- private use of the vehicle
- ordinary commuting costs
- claiming both mileage and actual running costs for the same vehicle
- capital improvements being treated as if they were normal repairs
What records should you keep?
If you claim actual vehicle costs, you should keep the following paperwork in the safe place:
- garage invoices
- service records
- MOT receipts
- insurance documents
- fuel receipts where relevant
- a mileage log or other record showing business versus private use
You need to keep accurate records in case you need to show how you worked out the business proportion of your claim.
Read more in our guide to bookkeeping for the self-employed.
Read the official HMRC guidance
HMRC says that if you use simplified vehicle expenses, the mileage rate covers the costs of buying and running your vehicle, including insurance, repairs, servicing, and fuel.
If you use actual costs instead, the normal rules on allowable business expenses apply.
Read the official guidance here:
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