Business Vehicle Expenses: What You Can Deduct and How to Track Them

When you use your car for work, business vehicle expenses, costs incurred when using a vehicle for job-related purposes that may be tax-deductible. Also known as commercial vehicle deductions, it’s not just about gas—it’s about the full picture of how your vehicle supports your income. Whether you drive for deliveries, client meetings, or remote job sites, the IRS and HMRC let you claim part of those costs. But you can’t just guess. You need records, rules, and a clear method.

There are two main ways to claim these costs: the standard mileage rate, a fixed amount per mile driven for business, set annually by tax authorities or the actual expense method, tracking every dollar spent on fuel, repairs, insurance, and depreciation. Most small business owners pick the mileage method because it’s simpler. In 2024, the IRS rate was 67 cents per mile. The UK’s HMRC allows 45p per mile for the first 10,000 miles. But if you drive 20,000 miles a year for work and your car costs £8,000 to maintain, the actual expense method could save you more. You just need receipts, a logbook, and consistency.

What counts as a deductible expense? Fuel, oil changes, tire replacements, insurance, registration, parking fees, and tolls—all if they’re for business use. Even cleaning your car after hauling tools or equipment can qualify. But personal trips? No. That’s why keeping a daily log matters. Write down the date, miles driven, destination, and business purpose. Apps like MileIQ or even a simple spreadsheet work. Don’t wait until tax season to start. Track it every day.

What about leased vehicles? You can still deduct business use, but the rules change. If you lease a car for work, you can deduct the business portion of your lease payments and related costs. But you can’t also claim depreciation. And if your employer reimburses you for mileage, that reimbursement is usually tax-free—up to the official rate. If they pay more than that, the extra is taxable income.

Business vehicles aren’t just for sales reps or contractors. Freelancers, plumbers, electricians, and even consultants who visit clients regularly can claim these costs. One electrician in Manchester saved £1,200 last year just by tracking his mileage and fuel receipts. He didn’t upgrade his truck. He didn’t buy a new car. He just started writing things down.

And don’t forget fleet maintenance. If you run multiple vehicles for your business, keeping them running efficiently cuts costs. Tire pressure, oil changes, and timely repairs aren’t just about safety—they’re about your bottom line. A car that’s poorly maintained burns more fuel and breaks down more often. That’s money you’re throwing away.

There’s no magic formula. It’s about matching your real usage to the rules. The post collection below gives you practical tools: how to track mileage without hassle, which repairs you can claim, how to handle shared vehicles, and what happens if you get audited. You’ll find real examples from UK and US drivers who’ve done this right—and some who didn’t. No fluff. Just what works.