23. May 2026

HMRC Mileage Allowance Rates Increase in 2026 – What Businesses and Employees Need to Know

HMRC has announced an increase to the Approved Mileage Allowance Payments (AMAPs) for business travel using a personal vehicle. From 6 April 2026, the tax-free rate for cars and vans rises from 45p to 55p per mile for the first 10,000 business miles in a tax year, while the 25p rate for mileage above 10,000 miles remains unchanged.

The updated rates apply to employees and company directors using their own vehicle for business journeys. Motorcycles and bicycles continue at 24p and 20p per mile respectively. Businesses can reimburse staff at these rates without creating a taxable benefit, provided accurate mileage records are maintained.

To claim mileage relief, keep a detailed log of each business journey, including dates, destinations, purpose of travel and miles travelled. Employees who are not fully reimbursed by their employer can claim tax relief on the shortfall through HMRC using form P87 or via Self Assessment. Sole traders can claim the mileage allowance directly in their tax return using HMRC’s simplified expenses method.

It is important to remember that ordinary commuting to a permanent workplace does not qualify as business mileage. HMRC mileage rates are intended to cover fuel, servicing, insurance, road tax and general vehicle running costs.