UK Mileage Claims Complete Guide 2026/27
- Vipul Kataria
- Jun 4
- 10 min read
HMRC Approved Mileage Allowance Payments (AMAPs) - New 55p Rate, Rules & How to Claim Tax-Free
If you drive your own car for work in the UK, you are entitled to claim a tax-free mileage allowance from your employer - or directly from HMRC. In a landmark move, HMRC has raised the approved car and van mileage rate from 45p to 55p per mile for the 2026/27 tax year, the first increase in 15 years. This comprehensive guide covers everything you need to know: the new rates, what counts as business mileage, how to make a compliant claim, what expenses are included, and how to avoid the most common pitfalls.
⚡ Quick Answer: What is the HMRC mileage rate for 2026/27?
Cars & Vans (own vehicle): 55p per mile for the first 10,000 business miles; 25p per mile above 10,000 miles. Motorcycles: 24p per mile (all miles). Bicycles: 20p per mile (all miles). Passenger supplement: 5p per mile per fellow employee carried. This is the first increase since 2011. The 10p rise applies from 6 April 2026. |
Table of Contents
HMRC Approved Mileage Rates 2026/27 at a Glance
What Counts as Business Mileage?
How to Make a Mileage Claim - Step-by-Step
Worked Examples: How Much Can You Claim?
Employer Obligations & Reporting Requirements
Electric Vehicles & Advisory Fuel Rates
Record-Keeping Requirements
Self-Employed Mileage Claims
VAT on Mileage (VAT-Registered Businesses)
What Is Included and Excluded in a Mileage Claim?
FAQs - UK Mileage Claims 2026/27
Key HMRC Resources
1. HMRC Approved Mileage Rates 2026/27 at a Glance
The HMRC Approved Mileage Allowance Payment (AMAP) scheme sets the maximum tax-free rate at which employers can reimburse employees who use their own vehicles for business travel. Payments up to this rate are exempt from income tax and National Insurance - making it one of the most generous tax reliefs available to UK workers.
2026/27 Current Rates (from 6 April 2026)
Vehicle Type | First 10,000 Miles | Above 10,000 Miles | Change vs 2025/26 |
Car / Van (personal) | 55p per mile | 25p per mile | ▲ +10p (was 45p) |
Motorcycle | 24p per mile | 24p per mile | No change |
Bicycle | 20p per mile | 20p per mile | No change |
Passenger supplement (per fellow employee) | 5p per mile | 5p per mile | No change |
Historical Rate Comparison
Tax Year | Cars & Vans (first 10k miles) | Cars & Vans (above 10k miles) | Motorcycles | Bicycles |
2011/12 – 2025/26 | 45p | 25p | 24p | 20p |
2026/27 onwards | 55p ▲ | 25p | 24p | 20p |
💡 Why Has the Rate Changed? Why did the rate change? The 45p rate had been frozen since 2011 despite significant rises in fuel costs, insurance premiums, and vehicle running costs. The 10p per mile increase for 2026/27 is designed to better reflect the real cost of using a personal vehicle for business purposes. |
2. What Counts as Business Mileage?
Understanding what qualifies as business mileage is critical. HMRC draws a clear distinction between personal and business travel — and getting it wrong can lead to tax penalties or rejected claims.
Qualifying Business Journeys
Travel to a temporary workplace (not your regular place of work)
Visiting clients or customers at their premises
Travel between two different places of work
Attending training or a conference at an external venue
Business errands such as trips to the post office or bank on behalf of the employer
Travel to a site that is not your regular or permanent workplace
Non-Qualifying Journeys (Cannot Be Claimed)
Your normal commute from home to your permanent workplace
Personal journeys or detours for personal reasons
Travel that is incidental to private use
Regular travel between home and a site you visit routinely
⚠️ Important: Commuting is NOT Business Mileage Key Rule: The daily commute from your home to your regular, permanent workplace is always personal travel under UK tax law — even if you do some work during the journey. It cannot be claimed as a business mileage expense under any circumstances. |
3. How to Make a Mileage Claim : Step-by-Step
Follow these four steps to ensure your mileage claim is compliant, accurate, and maximises the tax relief you are entitled to.
STEP 1 | Keep a Mileage Log Record every business journey: date, start location, destination, purpose of the journey, and miles driven. HMRC can request evidence at any time - a spreadsheet or mileage-tracking app is sufficient. |
STEP 2 | Calculate Your Approved Amount Multiply your business miles by the approved rate. For 2026/27: first 10,000 miles × 55p + any miles above 10,000 × 25p. Add 5p per mile for each qualifying fellow employee you carry as a passenger. |
STEP 3 | Check Your Employer's Reimbursement If your employer pays less than the HMRC approved rate, you may be owed Mileage Allowance Relief (MAR) on the difference. If your employer pays more than the rate, the excess is treated as taxable income. |
STEP 4 | Claim via the Correct Route Employees not in Self Assessment: claim via your HMRC online account or the P87 form. Self-employed individuals: include mileage as a business expense in your Self Assessment tax return. |
4. Worked Examples: How Much Can You Claim?
The following examples illustrate how the 2026/27 rates work in practice, including a comparison with the old 2025/26 rates to demonstrate the financial impact of the increase.
Scenario | Calculation | Approved Amount |
Employee drives 8,000 miles in own car (2026/27) | 8,000 × 55p | £4,400 |
Employee drives 12,000 miles in own car (2026/27) | 10,000 × 55p + 2,000 × 25p | £6,000 |
Same 8,000 miles at old 2025/26 rate (for comparison) | 8,000 × 45p | £3,600 |
Employer pays 40p/mile; employee drives 6,000 miles — MAR claim | (55p − 40p) × 6,000 = 15p × 6,000 | £900 MAR relief |
Carrying 2 fellow employees for 500 miles (passenger supplement) | 2 × 5p × 500 miles | £50 extra |
💰 Real-World Impact of the 55p Rate Impact of the Rate Change: An employee driving 10,000 business miles per year will receive £5,500 tax-free under the new rate — £1,000 more than under the old 45p rate. Over a typical working career, this is a meaningful improvement in take-home pay. |
5. Employer Obligations & Reporting Requirements
Employers must understand their obligations under the AMAP scheme to avoid HMRC penalties and ensure employees receive the correct tax treatment.
Employer Scenario | Obligation & Reporting |
Pay at or below approved rate | No reporting needed. Payment is fully tax-free and NIC-free. No P11D entry required. |
Pay above the approved rate | Excess must be reported on form P11D. Income tax and Class 1A NIC apply on the excess. The excess must also be added to payroll and subject to PAYE deductions. |
Pay nothing or below the rate | Employees can claim Mileage Allowance Relief (MAR) directly from HMRC on the shortfall. Employers can optionally join the MARORS scheme to report on employees' behalf. |
6. Electric Vehicles & Advisory Fuel Rates
Personal Electric Vehicles (Own Car)
If you use your own electric car for business travel, the standard HMRC approved mileage rate applies - 55p per mile for the first 10,000 business miles in 2026/27. The rate is identical regardless of whether your vehicle is petrol, diesel, hybrid, or fully electric.
Company Car Advisory Fuel Rates (AFRs) - from March 2025
Advisory Fuel Rates (AFRs) are used when employees need to be reimbursed for fuel costs in a company car, or to repay private mileage costs to avoid a fuel benefit charge. They are updated quarterly by HMRC.
Engine Size | Petrol | Diesel | LPG |
Up to 1,400cc | 13p | — | 10p |
1,401–2,000cc | 15p | — | 12p |
Over 2,000cc | 23p | — | 17p |
Up to 1,600cc (diesel) | — | 12p | — |
1,601–2,000cc (diesel) | — | 14p | — |
Over 2,000cc (diesel) | — | 18p | — |
Electric company car | 7p per mile | — | — |
⚠️ Note on AFRs Advisory Fuel Rates change quarterly. Always verify the current rates at gov.uk before calculating any company car fuel claims. |
7. Record-Keeping Requirements
HMRC does not prescribe a specific format for mileage records, but you must be able to evidence every business journey if investigated. Your mileage log should capture the following for each trip:
Field | Notes |
Date of journey | The date the business travel took place |
Start location | Address or place name of journey origin |
End location | Address or place name of destination |
Purpose of journey | Business reason (e.g. 'client meeting at XYZ Ltd') |
Miles driven | Total miles for that journey |
Running total | Cumulative miles in the tax year - critical for tracking the 10,000-mile threshold |
📂 How Long Must You Keep Records? Retention Period: HMRC can investigate up to 4 years back (or 6 years for serious errors or deliberate non-compliance). Keep all mileage records for a minimum of 6 years. Digital records and app-based mileage logs are fully accepted by HMRC. |
8. Self-Employed Mileage Claims
Self-employed individuals and sole traders have two options for claiming vehicle costs as a business expense: the HMRC simplified mileage rate or the actual cost method.
Method | How It Works | Best For |
Simplified mileage (approved rates) | Multiply business miles by the HMRC approved rate. No need to separately track fuel, insurance, servicing, or depreciation. | Most sole traders & freelancers |
Actual cost method | Apportion the real vehicle costs (fuel, insurance, servicing, depreciation) by the percentage of business use. | High-cost vehicles used predominantly for business |
🔍 Key Rule for Self-Employed Important: Once you choose the simplified mileage rate for a particular vehicle, you must continue using that method for the lifetime of that vehicle in the business. You cannot switch between methods mid-way. |
9. VAT on Mileage (VAT-Registered Businesses)
VAT-registered businesses can reclaim VAT only on the fuel element of a mileage reimbursement - not on the full approved rate. To calculate the reclaimable VAT:
• Identify the HMRC Advisory Fuel Rate (AFR) for the relevant vehicle type and engine size
• Apply the standard VAT fraction: divide by 6 (at 20% VAT)
• Ensure you hold valid VAT fuel receipts to evidence the claim
🧓 VAT Reclaim Example Example: Fuel element of 12p per mile × 1/6 VAT = 2p VAT per mile. On 1,000 qualifying business miles, this equals £20 VAT to reclaim. Valid VAT fuel receipts must be retained as evidence. |
10. What Is Included and Excluded in a Mileage Claim?
The HMRC approved mileage rate is an all-in-one reimbursement designed to cover all running costs of using your personal vehicle for work. This means some costs are already bundled into the rate and cannot be claimed separately.
Covered by the Mileage Rate — Do NOT Claim Separately
Expense | Why It Is Included |
Fuel / petrol costs | Already factored into the approved per-mile rate |
Vehicle depreciation | Wear and tear is included in the rate calculation |
Insurance (business-use portion) | Covered within the mileage allowance |
Servicing & maintenance | Oil changes, tyres, brakes - all bundled in |
MOT / vehicle inspection costs | Included as part of running costs |
Vehicle registration fees (proportional) | Covered within the rate |
NOT Covered — Claim These Separately on Top of Mileage
Expense | Notes |
Parking fees | Fees at a client site, meeting venue, or conference |
Toll charges / road toll fees | Any toll paid during a qualifying business journey |
Congestion charges | e.g. London's ULEZ / congestion zone fees during business travel |
Ferry or tunnel crossing fees | e.g. Channel Tunnel for work travel |
Bridge tolls | Charged separately from the mileage reimbursement |
Never Claimable via Mileage
Commuting to your regular workplace (home to permanent workplace is personal travel)
Personal errands during a business trip (only the business purpose qualifies)
Fines, penalties & speeding tickets (personal liabilities, never reimbursable)
Car finance or loan repayments (a personal financing decision)
Car wash or cosmetic expenses (not a business running cost)
Quick Reference Summary
Expense | Covered by Mileage Rate? | Claim Separately? |
Fuel | ■ Covered | ■ Do not claim separately |
Vehicle depreciation | ■ Covered | ■ Do not claim separately |
Maintenance / servicing | ■ Covered | ■ Do not claim separately |
Insurance | ■ Covered | ■ Do not claim separately |
Parking fees | ■ Not covered | ■ Claim separately |
Tolls / road charges | ■ Not covered | ■ Claim separately |
Congestion charges | ■ Not covered | ■ Claim separately |
Commuting to office | ■ Not claimable at all | ■ Not claimable at all |
Traffic fines | ■ Not claimable at all | ■ Not claimable at all |
11. Frequently Asked Questions - UK Mileage Claims 2026/27
Q: What is the HMRC mileage rate for cars in 2026/27?
A: The HMRC approved mileage rate for cars and vans in 2026/27 is 55p per mile for the first 10,000 business miles, and 25p per mile for any mileage above that threshold. This is an increase of 10p from the previous rate of 45p, which had been frozen since 2011.
Q: Can I claim mileage if my employer does not reimburse me?
A: Yes. If your employer pays nothing or pays less than the HMRC approved rate, you can claim Mileage Allowance Relief (MAR) directly from HMRC. Employees not in Self Assessment can use the HMRC online account or complete a P87 form. Self-employed individuals include it in their Self Assessment return.
Q: Is the 55p mileage rate the same for electric cars?
A: Yes. The HMRC approved mileage rate of 55p per mile applies to all personal vehicles - including electric cars - regardless of fuel type. The rate is the same for petrol, diesel, hybrid, and fully electric vehicles.
Q: What records do I need to keep for a mileage claim?
A: HMRC requires you to record for each journey: the date, start and end location, purpose of the trip, and the number of miles driven. A running annual total is also recommended to track the 10,000-mile threshold. Records should be kept for at least 6 years.
Q: Can I claim mileage for commuting to my regular workplace?
A: No. Travel between your home and your permanent, regular workplace is classified as personal commuting under UK tax rules and cannot be claimed as a business mileage expense under any circumstances.
Q: What happens if my employer pays me more than 55p per mile?
A: If your employer reimburses you above the HMRC approved rate, the excess is treated as taxable income. Your employer must report it on a P11D form, and income tax and Class 1A National Insurance apply on the excess amount.
Q: Can self-employed people use the 55p mileage rate?
A: Yes. Self-employed individuals and sole traders can use the HMRC simplified mileage rate (55p for cars/vans for the first 10,000 miles) as a business expense in their Self Assessment return, rather than claiming actual vehicle costs. Once chosen for a vehicle, the method must be used consistently for that vehicle's life in the business.
12. Key HMRC Resources
Resource | Where to Find It |
Approved mileage rates (AMAPs) | gov.uk → Travel mileage and fuel rates and allowances |
Advisory Fuel Rates (quarterly updates) | gov.uk → Advisory fuel rates |
P87 — claim tax relief on job expenses | gov.uk → Claim tax relief for your employment expenses (P87) |
Self Assessment — mileage as expense | gov.uk → Self Assessment tax return |
HMRC Business Income Manual BIM75010 | HMRC technical guidance on simplified expenses |
HMRC helpline (Income Tax) | 0300 200 3300 |
Summary
The 2026/27 tax year brings the most significant update to UK mileage reimbursement in 15 years. The jump from 45p to 55p per mile for cars and vans means employees and self-employed individuals driving for business can now claim meaningfully more tax-free. Whether you are an employee looking to maximise Mileage Allowance Relief, a sole trader managing vehicle expenses, or an employer reviewing your reimbursement policy, understanding the new AMAP rules is essential.
Always verify rates at gov.uk or consult a qualified tax adviser, as HMRC can update guidance throughout the tax year.
🏢 About Virtual Clone Virtual Clone helps UK businesses and individuals stay on top of HMRC guidance, tax rates, and financial compliance. Visit www.virtualclone.co.uk for more guides, tools, and resources. |
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