UK HMRC Mileage Rates and Allowances for 2026

What is a car mileage allowance?

A car mileage allowance is designed to fairly compensate individuals for the costs accrued using their private vehicles for business purposes. This compensation is designed to cover things like fuel, wear and tear, insurance, and maintenance.

The HMRC mileage allowance is a tax-free rate set by the UK government to reimburse employees or self-employed individuals for business-related travel. 

What are HMRC Mileage Allowance Payments? (MAP)

Mileage Allowance Payments (MAPs) are the payments that employers make to reimburse employees travelling for work. These can be lump sums, fixed rates per mile or reimbursement for actual expenditure.

MAPs up to a certain threshold are not taxed, these are known as AMAPs, Approved Mileage Allowance Payments. Payments that exceed these thresholds may be subject to tax.

The mileage rate for the 2026/27 tax year

AMAP mileage rates vary depending on the vehicle being used and the amount of miles covered in a year. 

Here's what you can expect to be reimbursed for business travel in the 2026/27 tax year.

Cars and vans Mileage Rates

Owned By Employee

The mileage rate for personally owned cars and vans used for business can vary depending on the total mileage for the year. For 2026, HMRC mileage rates are:

• 55p/mile (First 10,000 miles covered)
• 25p/mile (Each mile over the first 10,000)

This same rate applies for personally owned electric cars.

The HMRC 10,000 mile threshold

For cars and vans, a 10,000 mile threshold applies to mileage covered. For the first 10,000 miles, 55p/mile is the standard rate. For any miles covered beyond the first 10,000, the rate is 25p/mile.

Company car mileage rates: HMRC Advisory Fuel Rates

Company cars work differently. Instead of AMAP rates, HMRC publishes Advisory Fuel Rates (AFRs) – the rate per mile an employer can reimburse for business fuel, based on fuel type and engine size. Unlike AMAP rates, AFRs are reviewed every 3 months, on 1 March, 1 June, 1 September, and 1 December.

As of the latest HMRC guidance, the advisory rate for electric company cars is 7p/mile for home charging and 15p/mile for public charging. Hybrids count as petrol or diesel.

Motorcycles mileage rate

The recommended rate for a personally owned motorcycle is 24p/mile (for all mileage).

Bicycles mileage rate

For a bicycle, the recommended HMRC mileage rate is 20p/mile (for all mileage).

Passenger payments

If you give a colleague a lift on a business journey, you can claim an extra 5p per mile per passenger, tax-free, on top of your normal rate. The passenger has to be an employee, and the trip has to be a work journey for them too.

There's a catch worth knowing: if your employer doesn't pay the passenger rate, you can't claim tax relief on the difference. Unlike the standard mileage rate, passenger payments are use-them-or-lose-them.

What can be reimbursed by Mileage Allowance?

The reimbursement is designed to cover a few essential expenses including:

• Fuel costs
• Vehicle maintenance and repairs
• Insurance for business travel
• Depreciation

How are Mileage Tax Rates calculated?

A fixed number for HMRC mileage rates and allowances makes calculations simple. 

Suppose you drive 8,000 miles for work in a year. Here's how you might calculate your reimbursement:

8,000 miles × 55p = £4,400 (reimbursed tax-free)

How to apply the Business Mileage Rates

If you’re an employer

Employers can provide Mileage Allowance Payments (MAPs) to employees to reimburse them for business travel in their private vehicles.Employers should keep clear records of reimbursements and mileage for any future auditing.

If you’re an employee

If your employer reimburses you at less than the approved rate, you can claim tax relief on the difference. HMRC calls this Mileage Allowance Relief (MAR), and it's yours to claim – you just have to ask for it.

Work out what you're owed. Take the approved amount, then subtract what your employer actually paid you:

• 9,000 business miles at the approved rate: 9,000 × 55p = £4,950
• Your employer paid 25p a mile: 9,000 × 25p = £2,250
• The difference you can claim relief on: £2,700

You get relief at your tax rate, so a basic rate taxpayer would get £540 back, and a higher rate taxpayer £1,080.

How to claim. 
HMRC has a free online service that checks whether you can claim and walks you through it – start at Claim tax relief for your job expenses on GOV.UK. If you already file a Self Assessment tax return, claim through the return instead. Claims for earlier years go in on form P87, and you can go back 4 tax years.

Driving a company car rather than your own? HMRC's company car and car fuel benefit calculator works out the taxable value of the car and any fuel your employer provides.

If you’re self employed

People who are self employed can deduct business mileage from their taxable income when completing their self assessment tax returns. 

Using the standard calculation of “miles covered x mileage rate = total deductible” is a simple way to make sure that business mileage is properly accounted for.

Keeping a mileage log

Keeping an accurate log of your mileage will make it easier to claim for reimbursements and relief on your business mileage.

Whether you’re an employer, freelancer, or self-employed worker, keeping a log means that you can  easily calculate reimbursements and provide any evidence if it’s required for auditing.

Automated Mileage tracking and logging

There are lots of tools that can be used for tracking mileage and staying on top of business expenses. Many banking and accounting apps have built-in mileage trackers and ways to categorise expenses.

Sources:

• Mileage and fuel rates and allowances (gov.uk)