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HMRC Mileage Rates 2026: The Complete Guide for UK Businesses
HMRC mileage rates rose to 55p per mile for 2026/27 — the first increase since 2011. Here are the full AMAP rates, how the 10,000-mile rule works, and how to calculate a claim.
For the first time in over a decade, the HMRC mileage rates have changed. From 6 April 2026, the approved rate for the first 10,000 business miles in a car or van rose from 45p to 55p per mile. If your business reimburses employees for using their own vehicles, here's everything you need to know for the 2026/27 tax year.
HMRC mileage rates 2026: the quick answer
These are the Approved Mileage Allowance Payment (AMAP) rates for the 2026/27 tax year:
| Vehicle | First 10,000 business miles | Over 10,000 business miles |
|---|---|---|
| Cars and vans | 55p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
You can also pay 5p per mile, per passenger when an employee carries fellow employees on the same business journey.
What changed for the 2026/27 tax year?
The only change is to cars and vans: the rate for the first 10,000 business miles increased from 45p to 55p per mile, effective 6 April 2026. This is the first increase to the AMAP car rate since 2011.
Two things stayed the same:
- The rate for business miles over 10,000 remains 25p per mile.
- Motorcycle (24p), bicycle (20p), and passenger (5p) rates are unchanged.
What are Approved Mileage Allowance Payments (AMAPs)?
AMAPs are the amount an employer can reimburse an employee tax-free and National-Insurance-free for using their own car, van, motorcycle, or bicycle on business journeys. As long as you pay at or below the HMRC rate, there's no tax to report and nothing goes on a P11D.
Business journeys do not include an employee's ordinary commute between home and their permanent workplace — only travel undertaken for work counts.
How the 10,000-mile rule works
The higher rate applies to the first 10,000 business miles an employee drives in the tax year. Every mile after that is paid at the lower rate:
- Miles 1–10,000: 55p each (cars and vans)
- Miles 10,001+: 25p each
The counter resets on 6 April each year, at the start of the new tax year.
How to calculate a mileage claim (worked example)
Say an employee drives 12,000 business miles in the 2026/27 tax year in their own car:
- First 10,000 miles × 55p = £5,500
- Remaining 2,000 miles × 25p = £500
- Total tax-free reimbursement = £6,000
If they also carried a colleague for 1,000 of those business miles, they could claim an extra 1,000 × 5p = £50 in passenger payments on top.
What if your employer pays less than the AMAP rate?
If an employer reimburses below the approved rate — say 30p per mile instead of 55p — the employee can claim tax relief on the shortfall through Mileage Allowance Relief (MAR). They claim the difference between what they received and the AMAP rate via their Self Assessment return or a P87 form.
If an employer pays more than the approved rate, the excess is treated as taxable pay.
Do you pay tax on mileage reimbursements?
No — as long as payments are at or below the AMAP rates, mileage reimbursement is completely tax-free for the employee and free of employer National Insurance. Only amounts paid above the approved rate are taxable.
Keeping an HMRC-compliant mileage record
To support a claim, employees should log for each business trip:
- The date of the journey
- The start and end locations
- The business reason for the trip
- The miles travelled
Accurate, contemporaneous records are what HMRC expects if a claim is ever queried — a shoebox of receipts and rough guesses is not enough.
Frequently asked questions
What are the HMRC mileage rates for 2026? For 2026/27, cars and vans are reimbursed at 55p per mile for the first 10,000 business miles and 25p thereafter. Motorcycles are 24p, bicycles 20p, and passenger payments 5p per mile.
Did HMRC mileage rates go up in 2026? Yes. The car and van rate for the first 10,000 miles rose from 45p to 55p from 6 April 2026 — the first increase since 2011.
Does the 55p rate apply to electric cars? Yes. AMAP rates are the same regardless of fuel type when an employee uses their own car, including electric vehicles. (The separate Advisory Electricity Rate only applies to company cars.)
Can I claim mileage if my employer already reimburses me? Only if your employer pays below the AMAP rate — you can then claim tax relief on the difference. If they pay the full rate, there's nothing extra to claim.
Do these rates cover the commute to work? No. Ordinary commuting between home and a permanent workplace isn't a business journey, so it doesn't qualify for tax-free mileage.
How Repay360 handles mileage
Repay360 applies your company's mileage rate automatically to every trip, so employees never have to do the maths. Our new address-to-distance calculator even works out the driving miles between a start and end point for you — just type the two locations and the mileage fills in, ready to submit. Get started free.
Rates are correct for the 2026/27 UK tax year as published by HMRC and were accurate at the time of writing. Always confirm the current figures on GOV.UK. This article is general information, not tax advice — check with your accountant for your specific situation.