Mileage Allowance UK: How Much Can You Claim Per Mile?

For the 2026/27 tax year, the UK mileage allowance for cars and vans is 55p per mile for the first 10,000 business miles, dropping to 25p per mile after that. This is HMRC's Approved Mileage Allowance Payment (AMAP) rate, and it's the first change to the car and van rate since 2011 — a 10p increase from the previous 45p rate, announced on 21 May 2026 and backdated to 6 April 2026.

At CalZone, we've broken down exactly what you can claim, how the calculation works, and how to claim tax relief if your employer pays you less than the approved rate.

What Is Mileage Allowance?

Mileage allowance — officially the Approved Mileage Allowance Payment (AMAP) — is the tax-free rate HMRC allows you to be reimbursed, or to claim as an expense, when you use your own personal vehicle for business travel. Instead of tracking individual costs like fuel, insurance, servicing, and depreciation separately, HMRC sets a single pence-per-mile rate that's intended to cover all of it in one go.

It applies whether you're an employee using your own car for work journeys, or self-employed and claiming mileage as a business expense through Self Assessment.

Current UK Mileage Allowance Rates for 2026/27

These are the rates that apply from 6 April 2026 to 5 April 2027, across England, Scotland, Wales, and Northern Ireland:

The 10,000-mile threshold applies to your total business mileage across the whole tax year, not per employer or per vehicle — so if you have more than one job, your business miles are combined when working out which rate applies.

Why Did the Rate Change in 2026?

The car and van AMAP rate had been frozen at 45p per mile since 2011 — 15 years without an increase, despite rising fuel, insurance, and vehicle running costs. Following a parliamentary review announced in March 2026, the Chancellor confirmed on 21 May 2026 that the rate would rise to 55p per mile for the first 10,000 business miles, legislated through the Taxation (Energy and Vehicles) Bill. The increase is retrospective, applying to every qualifying business mile driven since the start of the 2026/27 tax year on 6 April 2026.

Only the first-tier car and van rate changed. The rate for miles over 10,000, the motorcycle rate, the bicycle rate, and the passenger add-on all remain unchanged.

Worked Example: How Much Can You Claim?

Say you drive 12,000 business miles in your own car during the 2026/27 tax year:

• First 10,000 miles at 55p = £5,500
• Remaining 2,000 miles at 25p = £500
• Total tax-free mileage allowance: £6,000 (which is £1,000 more than under the old 45p/25p rate)

Does This Apply to Electric and Hybrid Cars?

Yes. There's no separate AMAP rate for personally owned electric or hybrid vehicles — the same 55p/25p structure applies regardless of fuel type. Whether you drive a petrol car, a diesel van, a hybrid, or a fully electric vehicle for business, the mileage allowance calculation is identical.

What Counts as Business Mileage?

Business mileage generally includes:

• Travelling to visit clients or customers.
• Journeys between different work locations.
• Travel to a temporary workplace.

It does not include ordinary commuting between your home and your regular, permanent workplace.

Employees: How Reimbursement Works

If your employer reimburses you at or below the HMRC-approved rate, the payment is tax-free and doesn't need to be reported. There are three common scenarios:

1. Your employer pays the full 55p/25p rate: You receive the full amount tax-free — nothing further to claim.
2. Your employer pays less than the approved rate: You can claim the shortfall back as Mileage Allowance Relief (MAR) through Self Assessment or Form P87.
3. Your employer pays more than the approved rate: The excess is treated as taxable income and must be reported on a P11D.

Worked Example: Claiming Mileage Allowance Relief

If your employer reimburses you at 30p per mile and you drove 8,000 business miles in the tax year:

• Approved rate: 8,000 × 55p = £4,400
• Amount already reimbursed: 8,000 × 30p = £2,400
• Shortfall you can claim as MAR: £2,000

This £2,000 isn't paid to you directly — it's relief against your taxable income, so the actual cash benefit depends on your tax rate. A basic-rate (20%) taxpayer would see roughly £400 back through their tax code.

Self-Employed: How to Claim

If you're self-employed, you can use the same flat mileage rates as a "simplified expense" instead of tracking and claiming actual vehicle running costs (fuel, insurance, repairs, depreciation) individually. You simply multiply your business miles by the appropriate rate and deduct that figure from your business profits on your Self Assessment return.

Records You Need to Keep

HMRC expects you to keep a mileage log recording, for each business journey:

• The date of the journey.
• The destination and business purpose of the trip.
• The number of miles driven.

Passenger Payments

If you carry a colleague who is also travelling on business in your car or van, you can claim an extra 5p per mile per passenger, on top of your own mileage rate. This only applies to fellow employees travelling for a genuine business purpose.

Disclaimer

This article is for general information only and does not constitute financial or tax advice. Mileage allowance rates and rules can change, and individual circumstances vary — always check GOV.UK or speak with a qualified accountant for advice specific to your situation.