Understanding the Basics of Claiming Car Mileage Allowance with HMRC

HMRC Mileage Allowance & Claim Rules 2026/27

If you use your own car for business journeys in the UK, HMRC lets you claim 55p per mile for the first 10,000 business miles in a tax year, and 25p per mile after that. These rates — Approved Mileage Allowance Payments, or AMAPs — apply to employees and self-employed sole traders alike. This guide explains the current rates, who can claim, the process for claiming through your employer, a P87 form or Self Assessment, and the mileage records HMRC expects you to keep.

HMRC Mileage Allowance Rates for 2026/27

HMRC sets a flat per-mile rate intended to cover all the running costs of using a personal vehicle for work — fuel, insurance, road tax, servicing, depreciation and wear. As long as your employer pays at or below the AMAP rate, the payment is tax-free and does not need to be reported to HMRC.

Only the car and van rate for the first 10,000 miles changed. Motorcycles remain at 24p, bicycles at 20p, and the passenger supplement at 5p per passenger per mile.

The same 55p / 25p split applies to electric, hybrid, petrol and diesel cars — HMRC does not publish a separate AMAP rate for personally-owned EVs. The 10,000-mile threshold resets at the start of each tax year (6 April).

What changed, and why

The increase was legislated through the Taxation (Energy and Vehicles) Act 2026, substituting “55p” for “45p” in section 230(2) of the Income Tax (Earnings and Pensions) Act 2003 and the corresponding provision for self-employed simplified mileage rates. HMRC set out the measure in its policy paper on increasing mileage rates.

The rate had been frozen since 2011/12, and had been under sustained pressure from professional bodies and trade unions as motoring costs rose. The Treasury announced a review of AMAP rates on 25 March 2026; the increase followed on 21 May 2026, backdated to 6 April, as part of a package responding to elevated fuel prices.

Who Can Claim HMRC Mileage Allowance

Employees using their own vehicle

If you are paid through PAYE and use your personal car, van, motorcycle or bicycle for business journeys — travelling to a client site, or between offices — you can either be reimbursed by your employer at the AMAP rate, or claim Mileage Allowance Relief on the difference if your employer pays less.

Self-employed sole traders

Self-employed individuals can claim mileage as a business expense on their Self Assessment return. You can use the simplified flat-rate figures (which increased in line with AMAP for 2026/27) or calculate actual vehicle costs apportioned to business use. Once you choose a method for a given vehicle, you must stick with it for the lifetime of that vehicle.

Who cannot claim AMAP rates

If you drive a company car rather than your own vehicle, AMAP rates do not apply. HMRC publishes separate Advisory Fuel Rates for company-car drivers, which vary by engine size and fuel type and are reviewed quarterly — always check the current figures on GOV.UK rather than relying on a published table. Ordinary commuting from home to your usual place of work is also excluded; only travel to temporary workplaces, between work sites, or to client meetings counts as business mileage.

How to Claim HMRC Mileage Allowance

1. Reimbursement from your employer

If your employer pays at the full AMAP rate (55p per mile up to 10,000 miles, 25p thereafter), the payment is tax-free and no claim to HMRC is needed. The employer pays the mileage through payroll or expenses, with no P11D reporting required as long as the approved rates are not exceeded.

2. Mileage Allowance Relief — P87 form

If your employer pays less than the AMAP rate, or nothing at all, you can claim Mileage Allowance Relief on the shortfall. For employees who do not file a Self Assessment return and whose total expenses claim is under £2,500 in the tax year, the standard route is form P87, submitted online through your HMRC Personal Tax Account or by post. You will need your National Insurance number and your employer’s PAYE reference. Relief is given by adjusting your tax code or as a refund.

3. Mileage Allowance Relief — Self Assessment

If you already file a Self Assessment return, claim the relief there instead. Employees enter it on the Employment pages under “Expenses you incurred in doing your job — business travel and subsistence expenses”. Self-employed sole traders enter business mileage as part of motor expenses on the Self-employment pages. Claims must be made within four years of the end of the tax year in which the travel took place.

A worked example at the new rate

HMRC Mileage Log Requirements

HMRC expects every claim to be supported by a contemporaneous mileage log. There is no prescribed format, but the log must show enough detail for the journey to be verified. For each business journey, record:

• The date of travel
• The starting point and destination (full addresses, not just town names)
• The business purpose of the trip — for example, “client meeting with [name]” or “site visit to [project]”
• The total business miles travelled
• The vehicle used, if you use more than one

A spreadsheet, paper logbook or dedicated mileage-tracking app are all acceptable, provided the records are accurate and complete. Because the rate drops from 55p to 25p after 10,000 miles, HMRC expects records showing when each journey happened and how far it was — not simply an annual total.

How long to keep mileage records

Employees should keep records for at least four years from the end of the tax year. Self-employed sole traders must keep records for at least five years from the 31 January Self Assessment submission deadline. If HMRC opens an enquiry, retention requirements can extend further.

Special Cases

Passenger supplement

If you carry a fellow employee as a passenger on a business journey in your own vehicle, an additional 5p per passenger, per mile can be paid tax-free on top of the standard AMAP rate. The passenger must be travelling for business purposes themselves — not a client, family member or someone you are giving a lift to. There is no relief if your employer pays less than 5p or nothing at all for carrying passengers. This is a frequently missed allowance.

Electric and hybrid vehicles

Personally-owned electric vehicles attract the same 55p / 25p rate as petrol and diesel cars under AMAP. Because the running cost of an EV is typically much lower, the AMAP rate is particularly favourable for high-mileage business drivers using personal EVs. This differs from company-car EVs, which use a separate advisory electricity rate published by HMRC and revised periodically.

National Insurance and relevant motoring expenditure

For National Insurance purposes, employers can deduct Relevant Motoring Expenditure up to a qualifying amount calculated using the first AMAP rate — now 55p. Relevant Motoring Expenditure covers mileage payments and related payments such as a car allowance, and any excess over the qualifying amount is subject to a Class 1 charge. The increase therefore affects NIC calculations as well as income tax relief, which is worth checking with payroll.

Multiple employers and the 10,000-mile threshold

Where you have more than one employer, the treatment depends on whether the employments are connected. HMRC treats closely associated employers as a single source for the purposes of the threshold; genuinely unconnected employments are treated separately. If this affects you, it is worth confirming the position rather than assuming.

Common Mistakes to Avoid

• Still reimbursing at 45p. The rate changed on 6 April 2026. Expense policies and payroll settings created before May 2026 will often still default to the old figure.
• Claiming for ordinary commuting. Travel from home to your normal workplace is not business mileage.
• Mixing personal and business journeys in the same log. Keep them clearly separated.
• Using AMAP rates for a company car. AMAP applies only to personally-owned vehicles; company-car drivers use Advisory Fuel Rates.
• Applying the higher rate beyond 10,000 miles. Once you cross the threshold in a tax year, the rate drops to 25p.
• Forgetting the passenger supplement. 5p per business passenger per mile is regularly overlooked.
• Missing the four-year claim window. Mileage Allowance Relief claims must be submitted within four years of the end of the relevant tax year.

Frequently Asked Questions

How much is HMRC mileage allowance for 2026/27?

55p per mile for the first 10,000 business miles in your own car or van, then 25p per mile thereafter. Motorcycles are 24p per mile and bicycles 20p per mile, both flat rates with no threshold. An additional 5p per mile can be claimed for each fellow employee carried as a business passenger.

Has the HMRC mileage rate changed?

Yes. The car and van rate for the first 10,000 business miles rose from 45p to 55p with effect from 6 April 2026, announced on 21 May 2026 and applied retrospectively to the start of the tax year. It is the first change since 2011/12. The 25p rate above 10,000 miles, the motorcycle and bicycle rates and the passenger supplement are all unchanged.

What was the mileage rate before April 2026?

45p per mile for the first 10,000 business miles and 25p thereafter. That rate applied from the 2011/12 tax year until the end of 2025/26. Claims relating to earlier tax years — which can still be made within the four-year window — use the rate that applied at the time, not the current one.

My employer still pays 45p. What can I do?

Employers are not obliged to reimburse at the approved rate; AMAP is a ceiling for tax-free payment rather than a statutory minimum. If your employer pays 45p, you can claim Mileage Allowance Relief on the 10p per mile difference for the first 10,000 miles — through a P87 if your total expenses claim is under £2,500 and you do not file Self Assessment, or on your tax return if you do. It is also worth raising with payroll, as many employers simply have not updated their policy.

How do I claim mileage from HMRC?

If your employer pays at the full AMAP rate, no claim is needed. If they pay less, claim Mileage Allowance Relief on the difference: use form P87 if you do not file Self Assessment and your total expenses are under £2,500, or include the claim in your Self Assessment return if you already file one. Self-employed sole traders claim mileage directly on the Self-employment pages.

Can I claim mileage if I am self-employed?

Yes. Self-employed sole traders can use the flat-rate simplified expenses scheme — which increased alongside AMAP for 2026/27 — or calculate actual vehicle running costs apportioned to business use. Whichever method you choose, you must continue with it for the life of that vehicle and keep accurate records.

Can I claim HMRC mileage for an electric car?

Yes — provided the EV is your own personal vehicle, the standard 55p / 25p AMAP rates apply exactly as for petrol or diesel cars. There is no reduced rate for personally-owned EVs. Different rates apply to company-car EVs, which use HMRC’s advisory electricity rate.

What counts as business mileage?

Travel to a temporary workplace, journeys between different work sites, visits to clients or suppliers, and travel from home to a temporary workplace where you are not based. Ordinary commuting between home and your regular workplace does not count, even if you sometimes work irregular hours.

References & Further Reading

• GOV.UK — Travel: mileage and fuel rates and allowances
• GOV.UK — Increasing mileage rates (policy paper)
• GOV.UK — Advisory fuel rates for company cars
• House of Commons Library — Mileage Allowance Payments

This guide is general information for UK taxpayers and employers, not tax advice. Rates are correct as at August 2026 — AMAP rates and Advisory Fuel Rates are subject to change, and Advisory Fuel Rates are reviewed quarterly. Check GOV.UK for the current position before acting.

Adrian Lawrence FCA

Founder & Managing Director, FD Capital

Adrian Lawrence FCA is the founder of FD Capital and a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW). He holds a BSc from Queen Mary College, University of London, and has over 25 years of experience as a Chartered Accountant and finance leader working with private, PE-backed and owner-managed businesses across the UK.

Adrian and his network of fractional Finance Directors regularly advise business owners and finance teams on HMRC-compliant expense policies, including mileage, subsistence and home-working allowances. Mileage is among the most commonly mishandled expense categories in UK SMEs — often resulting in either underpaid employees or non-compliant claims.

→ View Adrian’s ICAEW profile