HMRC mileage rates rise to 55p: what you can claim

For the 2026/27 tax year, the rate for the first 10,000 business miles has risen from 45p to 55p per mile. It is the first increase since 2011 and represents a rise of around 22%. The change applies retrospectively from 6 April 2026.

The rate for each business mile over 10,000 remains 25p. Motorcycle and bicycle rates also remain unchanged at 24p and 20p per business mile respectively.

What are the HMRC mileage rates for 2026/27?

These are approved tax rates, not a rule requiring every employer to pay them. They apply when an employee uses their own vehicle for qualifying business travel. Ordinary commuting between home and a permanent workplace does not normally qualify.

A simpler way to account for vehicle costs

HMRC’s approved mileage rates are designed to cover general running costs, including fuel, insurance, servicing, repairs, MOTs, vehicle tax and wear and tear. For employees, this means the mileage payment replaces a separate claim for those costs.

For eligible self-employed people, simplified mileage expenses can be used instead of calculating and apportioning actual vehicle costs. Once the flat-rate method is used for a vehicle, it generally needs to continue for as long as that vehicle is used in the business.

In either case, you need an accurate record of your business miles.

How to calculate a mileage claim

Example 1: 5,000 business miles

Taxpayer 1 travels regularly to meetings and records 5,000 business miles during the tax year.

Because the total is below 10,000 miles, all miles are calculated at 55p.

Example 2: 13,500 business miles

Taxpayer 2 travels daily to see patients and records 13,500 business miles during the tax year.

The first 10,000 miles are calculated at 55p, and the remaining 3,500 miles at 25p.

HMRC mileage rates: frequently asked questions

Will I pay tax on mileage payments?

You do not pay tax on mileage payments as long as they are paid at or below HMRC’s Approved Mileage Allowance Payment (AMAP) rates.

If your employer pays above the approved amount, the excess may be taxable.

I claimed mileage in April before the new rate was announced. What happens?

The new rate applies from 6 April 2026, even though it was announced later. Ask your employer whether earlier claims will be adjusted. If you received less than the approved amount, you may be able to claim Mileage Allowance Relief from HMRC on the difference.

Can I claim fuel, insurance and other vehicle costs as well?

For employees, no. The mileage rate is intended to cover fuel, insurance, MOTs, vehicle tax, servicing, repairs and wear and tear. Eligible self-employed people using simplified mileage expenses cannot also claim those actual running costs for the same vehicle.

Can I still claim after 10,000 business miles?

Yes. For cars and vans, the rate falls to 25p for each business mile after the first 10,000, so those additional miles should still be recorded and claimed where eligible.

What if my employer pays a different mileage rate?

Employers may reimburse more or less than HMRC’s approved rate. If you are paid less, you may be able to claim tax relief on the shortfall. This is tax relief, not repayment of the full difference. If you are paid more, the excess above the approved amount is usually taxable.

How should I keep a mileage log?

Record the date, business purpose and number of miles for each journey. Start and end locations are also useful and make the record easier to check.

Need help with mileage claims?

Mileage rules can differ depending on whether you are an employee, employer or self-employed. Stratos can help you review claims, understand tax relief and put the right records in place.

Speak to our team for advice based on your circumstances. We are here, navigating the way through the rules and towards the right next step.

Contact Stratos

Information correct at 18 August 2026 and based on HMRC guidance for the 2026/27 tax year. This article is for general information only and does not replace advice based on individual circumstances.