HMRC Mileage Allowance Rates 2026: What UK Drivers Can Claim
- 45p per mile — standard HMRC rate for first 10,000 business miles annually
- 25p per mile — reduced rate applies after 10,000 miles in the same tax year
- 15 years frozen — rates haven't increased since April 2011 despite rising costs
Understanding HMRC mileage allowance rates is crucial for UK drivers who use their personal vehicles for business. Whether you're employed or self-employed, these rates determine how much you can claim tax-free for business journeys.
Current HMRC Mileage Allowance Rates
The approved mileage allowance payment (AMAP) rates set by HMRC remain unchanged for 2026. These rates cover all running costs including fuel, maintenance, insurance, and depreciation.
| Vehicle type | First 10,000 business miles | Over 10,000 business miles |
|---|---|---|
| Cars and vans | 45p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
| Passenger supplement | 5p per passenger | 5p per passenger |
The 10,000-mile threshold applies to your total business miles in the tax year across all vehicles in that category, not separately to each car or van. Once your total car or van business mileage passes 10,000 miles, the 25p rate applies for the rest of that tax year.
Passenger payments are an additional 5p per passenger, per business mile, when you carry fellow employees in a car or van on journeys that are also work journeys for them. It is easy to miss this extra amount, so log passengers alongside the journey itself.
These rates have been frozen at the same level since April 2011, making them 15 years old in April 2026. HM Treasury announced a 'workers-first review' of approved mileage rates on 25 March 2026, after Chancellor Rachel Reeves highlighted that the rates had not changed since 2011. For now, the 2026/27 GOV.UK rates still show the 45p/25p structure unchanged.
What Qualifies as Business Mileage
Not all driving qualifies for mileage allowance claims. Business mileage includes travel for work that is not ordinary commuting, such as:
- Trips to visit clients or customers
- Travel between different workplaces
- Journeys to temporary workplaces
- Business-related meetings and conferences
Your regular commute from home to your permanent workplace doesn't qualify as business mileage. However, if you travel from home directly to a client meeting, that entire journey can be claimed.
How the Allowance Works for Employees
The HMRC approved mileage allowance payment rates are not mandatory, meaning employers can choose to reimburse staff at a higher or lower rate. Here's how different scenarios work:
If your employer pays the full HMRC rate: You receive tax-free reimbursement with no additional tax implications.
If your employer pays below the HMRC rate: You can claim tax relief on the difference through a Self Assessment tax return or by using form P87.
If your employer pays above the HMRC rate: The excess amount is treated as a taxable benefit and is subject to Income Tax and National Insurance contributions, and must be reported on a P11D form.
Self-Employed Drivers and Simplified Expenses
For self-employed individuals, simplified mileage rates can be used as an allowable expense to reduce their tax bill, instead of claiming individual costs like fuel or insurance. This approach often proves simpler than keeping detailed records of actual vehicle expenses.
You can choose between claiming simplified mileage expenses or actual costs, but you can't mix both methods for the same vehicle. Many self-employed drivers find the simplified approach easier to manage and often more beneficial financially.
What the Mileage Rate Covers
The approved mileage rates are intended to cover all running costs of the vehicle, including:
- Fuel or electricity costs
- Maintenance and servicing
- Tyres and repairs
- Insurance premiums
- Vehicle excise duty (road tax)
- Depreciation
This comprehensive coverage means you cannot claim additional expenses for these items when using the simplified mileage rates.
Government Review and Potential Changes
The review, referred to as a 'workers-first review', will focus on individuals who rely on a car for their job and will consult workers facing rising motoring costs. Treasury minister Dan Tomlinson described the review as 'well overdue'.
Any changes to the mileage rates would be announced at a future Budget. Until then, current rates remain in effect and drivers can continue claiming based on existing guidelines.
Record Keeping Requirements
Accurate record keeping is essential for mileage claims. You must maintain detailed logs showing:
- Date and purpose of each business journey
- Start and end locations
- Total mileage for each trip
- Client or business contact details
HMRC can request these records during compliance checks, and inadequate documentation can lead to disallowed claims and potential penalties. MileEZ features automatic journey detection and categorisation to ensure your records meet HMRC standards.
Electric Vehicle Considerations
For company car drivers with fully electric vehicles, HMRC maintains advisory electric rates (AERs). From 1 March 2026, the GOV.UK advisory rates are 7p per mile for home charging and 15p per mile for public charging. These rates apply to company cars when employees either need reimbursement for business travel or need to repay their employer for private mileage.
If you use your own personal electric car for business, you still claim the standard 45p/25p AMAP rate, just like a petrol or diesel car.
HMRC reviews advisory fuel and electric rates quarterly, so always check the latest GOV.UK update before using them for payroll or reimbursement decisions. Advisory rates for company cars are separate from AMAP rates for using your own car for business mileage.
Maximising Your Claims
To make the most of mileage allowances:
- Track all eligible business journeys, including short local trips that add up over time
- Plan efficient routes to minimise mileage where possible while still meeting business needs
- Keep comprehensive records from day one rather than trying to reconstruct journeys later
- Understand the 10,000-mile threshold across your total business miles for the tax year
Remember that every business mile counts towards potential tax savings. Use our UK mileage calculator to estimate your annual tax relief based on your typical business driving patterns.
Common Mistakes to Avoid
Many drivers miss out on legitimate claims through simple oversights:
- Failing to log short business trips around town
- Not claiming passenger payments when carrying colleagues
- Missing the distinction between commuting and business travel
- Inadequate documentation leading to rejected claims
The key is maintaining consistent, detailed records throughout the tax year rather than scrambling to piece together information when filing returns.
Track every mile with MileEZ
MileEZ automatically detects and categorises your business journeys, ensuring you never miss a claimable mile. Our tax-ready reports meet HMRC requirements and help maximise your mileage allowance claims. Whether you're employed or self-employed, MileEZ takes the hassle out of mileage tracking while keeping you compliant with tax regulations.