Van running cost calculator
Add up what the van really costs across fuel, insurance, tax, servicing, tyres and finance, and see the cost per mile. Then compare it against HMRC's mileage allowance, which for 2026 to 2027 tax year is 55.0p for the first 10,000 business miles and 25.0p after that.
The 55.0p rate is new. It replaced 45p, which had stood since 2011, and was backdated to 6 April 2026. Plenty of advice online still quotes the old figure. GOV.UK rates, checked 2026-08-26.
Monthly finance payments times twelve, or what the van drops in value over a year if you own it.
Of which fuel is £2,602.
45.0p a mile averaged across 15,000 miles.
A guide, not an answer. Capital allowances on a van you own outright are not included here and can change the result. Check with your accountant.
What the mileage allowance is worth
Because the first 10,000 miles are paid at a higher rate, the average per mile falls as you drive further. This catches people out on high mileage.
| Business miles a year | Allowance | Average per mile |
|---|---|---|
| 5,000 | £2,750 | 55.0p |
| 10,000 | £5,500 | 55.0p |
| 15,000 | £6,750 | 45.0p |
| 20,000 | £8,000 | 40.0p |
| 30,000 | £10,500 | 35.0p |
Source: GOV.UK approved mileage allowance payments. 2026 to 2027 tax year. Checked 2026-08-26.
What this calculator leaves out, on purpose
- Capital allowances. If you bought the van outright you may be able to claim against the purchase, which can make claiming actual costs considerably better than this comparison suggests. Modelling that properly needs your full position.
- Which method you already use. Once you choose mileage or actual costs for a vehicle you generally have to keep to it for as long as you have that vehicle.
- VAT. If you are VAT registered the fuel and running cost position is different again.
Treat the result as a starting point for a conversation with your accountant rather than a decision.
Common questions
What is the HMRC mileage rate for a van in 2026?
55p per mile for the first 10,000 business miles in a tax year, then 25p per mile after that. The 55p rate applies for the 2026 to 2027 tax year. It rose from 45p, which had stood since 2011, and the increase was backdated to 6 April 2026. The same rates apply to cars and vans.
Is it better to claim mileage or actual van running costs?
It depends on the van and the mileage. A cheap, economical van doing high mileage usually does better on the flat mileage allowance. An expensive van, or one doing low business mileage, often does better claiming actual costs. This calculator compares the two on your own numbers, but it deliberately leaves out capital allowances on a van you own outright, which can change the answer. Once you pick a method for a vehicle you generally have to stick with it, so it is worth asking your accountant before you decide.
What counts as a business mile?
Travel between jobs, to suppliers, and to temporary workplaces. Your ordinary commute from home to a permanent place of work does not count. For most mobile trades who go straight from home to a customer, the majority of driving is business mileage, but the distinction matters if you have a yard or unit you travel to daily.
Why did the mileage rate go up to 55p?
The rate had been frozen at 45p since 2011 while running costs rose substantially, so the allowance had fallen well behind what driving actually costs. The Chancellor confirmed the increase in May 2026 and backdated it to the start of the 2026/27 tax year on 6 April 2026. It is the first change in fifteen years.
Arithmetic, not tax advice. Rates checked against GOV.UK on 2026-08-26.
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