UK tax · 3 min read

HMRC Mileage Allowance Rates Explained (2026/27)

HMRC approved mileage rates for 2026/27: what you can be paid tax-free per business mile, how to claim relief, and worked examples.

By the Handy Tools Desk team · Published 14 November 2026

If you use your own car, van, motorbike or bicycle for work journeys, HMRC sets the rates your employer can pay you per mile without any tax or National Insurance. These are the Approved Mileage Allowance Payments, often shortened to AMAP. This article explains the rates for 2026/27, what happens if your employer pays less, and gives worked examples.

To work out your own figure, use the mileage allowance calculator.

The approved rates for 2026/27

Your employer can also pay up to 5p per mile for each colleague who travels with you on the same business trip.

The rate for cars and vans in 2026/27 is higher than the 45p that applied in 2025/26, so check that your employer's expenses policy has caught up.

What counts as a business mile

Business miles are journeys you make for your work – visiting a client, travelling to a temporary workplace or driving between sites. Your normal commute from home to your usual workplace does not count. The 10,000-mile limit for the higher rate applies to your total business miles in the tax year, not per journey.

Worked example: 6,000 miles

You drive 6,000 business miles in your own car. All of them fall within the first band:

• 6,000 × 55p = £3,300.00 can be paid to you tax-free.

Worked example: 14,000 miles

You drive 14,000 business miles in your own car:

• first 10,000 miles at 55p, then the remaining miles at 25p,
• total approved amount: £6,500.00.

If your employer pays less than the approved rate

Some employers pay less than the approved rate, or nothing at all. In that case you can claim Mileage Allowance Relief from HMRC on the difference. You do not get the difference back as cash – it reduces the pay you are taxed on, so the saving is the difference multiplied by your tax rate.

For example, if you drive 6,000 business miles and your employer pays nothing, the approved amount is £3,300.00. A basic-rate taxpayer would save 20% of that in tax. You can claim online through GOV.UK, and you need records of your business journeys.

If your employer pays more

Anything paid above the approved rate is treated as taxable pay. It goes through payroll and income tax and National Insurance are taken from the extra amount.

Self-employed? You can use the same rates

Sole traders and partnerships can use HMRC's flat rates (called simplified expenses) for business journeys instead of working out the actual cost of running a vehicle. If you choose the flat rates you cannot also claim fuel, insurance or servicing for that vehicle. Our guide to self-employed tax and the self-employed tax calculator show how the claim lowers your profit and your tax bill.

Keep a mileage log

Whichever way you claim, keep a simple record for each business trip: the date, where you went and why, and the miles driven. A spreadsheet or a notes app is fine. Good records make a claim quick and are what HMRC will ask for if it ever checks.

Frequently asked questions

Does the 10,000-mile limit reset each year?

Yes. The higher rate applies to the first 10,000 business miles in each tax year, running from 6 April to 5 April. After that the lower rate applies until the next tax year starts.

Can I claim for driving to my office?

No. Ordinary commuting between your home and your permanent workplace is not business travel, even if you sometimes work on the way.

Do the rates apply to electric cars?

Yes. The approved rates for cars and vans are the same whatever the fuel type when you use your own vehicle. Different advisory rates apply when you drive a company car, which this article does not cover.

How far back can I claim Mileage Allowance Relief?

HMRC normally lets you claim for up to four previous tax years, as well as the current one. You will need records of the journeys.

Open the mileage allowance calculator