Mileage Claims Loan Interest Explained | Trueman Brown

​Can Mileage Claims Include Loan Interest?

Many business owners ask about mileage claims loan interest and how it fits within HMRC’s mileage allowance rules.

Understanding the distinction between allowable expenses for employees and the self-employed is key to staying compliant while maximising deductions.

Understanding the Mileage Allowance

The HMRC Approved Mileage Allowance Payment (AMAP) system provides a flat-rate allowance for business travel:

  • Cars and vans: 45p per mile for the first 10,000 miles, then 25p per mile

  • Motorcycles: 24p per mile

  • Bicycles: 20p per mile

These rates are designed to cover fuel, maintenance, insurance, and other general running costs — but not mileage claims loan interest or any additional vehicle financing expenses.

Can Employees Claim Loan Interest?

For employees using their own vehicles under AMAP, HMRC guidance is clear: the flat rate covers all car-related costs, including loan interest.

This means that even if the vehicle was purchased with a loan or on hire purchase, no additional deduction for interest is allowed.

Infographic explaining HMRC mileage allowance and loan interest rules for UK taxpayers, showing differences for employees, self-employed, and company directors, with Trueman Brown contact details.

​Mileage Claims Loan Interest for the Self-Employed

Self-employed individuals have more flexibility. If they use simplified expenses based on mileage, HMRC has not explicitly stated that loan interest is disallowed.

Because interest is a financing cost rather than a purchase cost, it may be treated as a deductible expense if the vehicle is used for business.

However, those using the actual cost method—claiming a proportion of all vehicle expenses—can usually include a share of loan interest proportional to business use.

It’s important to maintain accurate records of both business and personal mileage.

Director and Company Car Considerations

Company directors, being employees of their own limited company, fall under AMAP rules.

Therefore, mileage claims loan interest cannot be added to the claim for them either. In such cases, it’s often more tax-efficient to structure vehicle ownership differently, depending on usage.

How Trueman Brown Can Help With Mileage Claims Loan Interest

At Trueman Brown, we specialise in helping individuals and businesses understand complex rules around expenses and deductions such as mileage claims loan interest.

Whether you’re self-employed, a company director, or managing employee expenses, we’ll help ensure your claims are accurate, compliant, and tax-efficient.

📞 Call us today on 01708 397262 or 📧 email mark@truemanbrown.co.uk for professional advice tailored to your situation.

Frequently Asked Questions

Can I claim loan interest on my business vehicle if I use HMRC mileage rates?
No, employees cannot claim extra for loan interest under AMAP. Self-employed individuals may be able to if they use actual expenses.

What’s the difference between AMAP and simplified expenses?
AMAP applies to employees; simplified expenses are for self-employed people who choose to claim a fixed mileage rate instead of actual costs.

Does loan interest count as a business expense?
Yes, if the loan directly funds a vehicle used for business and you’re claiming based on actual expenses, not fixed mileage rates.

Will HMRC change these rules soon?
As of 2025, no new HMRC guidance has restricted self-employed claims for interest on financed vehicles, but regular reviews are recommended.

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