The HMRC mileage rate 2026 remains at 45p per mile for the first 10,000 business miles driven in a car or van. After 10,000 miles the rate drops to 25p per mile for the rest of the tax year. These approved mileage allowance payments (AMAPs) have been frozen at this level since 2011, and understanding exactly how they work is worth real money — a typical employee driving 12,000 business miles can claim over £5,000 in tax-free reimbursement.
This guide covers the exact AMAP rates 2026, who can claim, how to claim through Self Assessment or P87, what Making Tax Digital means for your records, and the latest parliamentary push to increase the frozen rate.
AMAP Rates 2026/27: The Complete Rate Table
For the 2026/27 tax year (6 April 2026 to 5 April 2027), the HMRC approved mileage allowance payments are:
| Vehicle type | First 10,000 miles | Above 10,000 miles |
|---|---|---|
| Cars and vans | 45p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
On top of these rates, you can claim an additional 5p per mile for each passenger you carry on a business journey. This passenger supplement applies regardless of vehicle type.
A few important points about these AMAP rates for 2026:
- Electric vehicles use the same 45p/25p car rate. There is no separate AMAP rate for EVs, hybrids or any other fuel type.
- The rates are flat-rate. They are designed to cover all vehicle running costs in a single figure — fuel, insurance, depreciation, servicing, MOT and tyres.
- The 10,000-mile threshold resets each tax year on 6 April and is per person, not per employer. If you change jobs mid-year, your cumulative business miles carry across.
Who Can Claim the HMRC Mileage Rate 2026?
The 45p per mile rate benefits several groups, but the claiming mechanism differs by employment status.
Employees — if your employer reimburses you at less than 45p per mile (or nothing at all), you can claim Mileage Allowance Relief (MAR) for the shortfall, reducing your income tax bill.
Self-employed sole traders use the HMRC simplified expenses method — multiply business miles by the approved rate and deduct the total from trading profits.
Limited company directors can have their company reimburse them at up to 45p per mile tax-free when using a personal vehicle for company business.
Employers can pay up to the AMAP rate without creating a tax or NIC liability. Pay above this and the excess becomes taxable earnings.
What counts as a business journey?
Only journeys that are wholly, exclusively and necessarily for business qualify. This includes:
- Travelling to meet clients or customers
- Visiting a temporary workplace (one you attend for fewer than 24 months)
- Travelling between different business locations
- Attending training that your role requires
Ordinary commuting — the journey from your home to your permanent workplace — does not count. HMRC treats this as private travel in almost all circumstances.
How to Calculate Your Mileage Claim
Working out your AMAP entitlement is straightforward, but it pays to see the arithmetic clearly, especially around the 10,000-mile threshold.
Example 1 — Straightforward claim: If you drove 12,000 business miles in 2026/27:
- First 10,000 miles × 45p = £4,500
- Remaining 2,000 miles × 25p = £500
- Total: £5,000
Example 2 — Employer pays below the HMRC rate: Suppose your employer reimburses you at 25p per mile and you drove 8,000 business miles:
- HMRC rate: 8,000 × 45p = £3,600
- Employer paid: 8,000 × 25p = £2,000
- Shortfall (MAR claim): £1,600
As a basic-rate (20%) taxpayer, claiming that £1,600 in mileage allowance relief saves you £320 in tax. A higher-rate (40%) taxpayer saves £640 on the same mileage.
Example 3 — Carrying passengers: You and two colleagues drive 200 miles to a client meeting:
- Your mileage: 200 × 45p = £90
- Passenger supplement: 200 × 5p × 2 = £20
- Total claim: £110
How to Claim: P87 Form vs Self Assessment
Employees: Form P87
If you are an employee, do not file Self Assessment, and your total expenses claim is under £2,500, you can use HMRC Form P87. Key points for 2026:
- Since October 2024, most P87 claims must be submitted by post — HMRC removed the online and telephone options.
- You must include supporting evidence: a mileage log with dates, postcodes of start and end points, the business purpose of each journey, and the distance covered.
- Processing typically takes eight to twelve weeks.
If your total employment expenses claim is £2,500 or more, you must register for Self Assessment and claim through your tax return instead.
Self-employed: Self Assessment
Sole traders claim mileage as an allowable expense on the self-employment pages of their Self Assessment return. You enter your total business miles and the simplified expenses rate, and the deduction reduces your taxable profit.
Once you choose the simplified expenses (mileage) method for a particular vehicle, you must stick with it for as long as you use that vehicle in your business. You cannot switch to the actual costs method partway through.
For a detailed walkthrough of the Self Assessment process, see our guide to claiming mileage on your Self Assessment tax return.
What records must you keep?
HMRC requires a mileage log for every business journey recording the date, start and end locations (postcodes are ideal), the business purpose, and the distance driven. You must retain these records for at least six years. HMRC can request them during a compliance check, and incomplete records may lead to your claim being reduced.
Tripbook records each journey automatically using GPS, captures the route and distance, and lets you tag trips as business or personal — so your mileage log is always complete and ready for HMRC.
Making Tax Digital and Mileage Records from April 2026
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) begins on 6 April 2026 for sole traders and landlords with qualifying income above £50,000. Under MTD you must use compatible software to keep digital records and submit quarterly updates to HMRC instead of a single annual return.
For mileage claims, your business miles and simplified expenses deduction need to flow through MTD-compatible software. A mileage tracking app like Tripbook that exports itemised reports makes this far easier — hand your accountant a ready-made summary each quarter instead of scrambling through months of paper notes.
HMRC has confirmed a soft landing for 2026/27: no penalty points for late quarterly submissions, although late payment penalties still apply. If your qualifying income is between £30,000 and £50,000, MTD ITSA applies from April 2027.
Will the HMRC Mileage Rate Increase?
The 45p per mile AMAP rate has been frozen since April 2011 — over 15 years. In that time, vehicle running costs have risen substantially, and pressure to increase the rate has grown.
On 10 March 2026, MPs debated the issue in the House of Commons following a petition with over 41,500 signatures. MPs highlighted that the true cost of running a vehicle is around 67p per mile — well above 45p. Public-sector workers covering hundreds of business miles each month are effectively paying to do their jobs.
The Chancellor acknowledged motoring costs have evolved significantly and stated the Government would consider the matter at a future fiscal event. The RAC Foundation has calculated a fair rate would be around 63p per mile.
For now, though, the rates remain unchanged for 2026/27. If an increase is announced, it would most likely take effect from April 2027 at the earliest. For the latest developments, see our article on whether HMRC will increase the mileage rate.
Advisory Fuel Rates: Company Cars Are Different
If you drive a company car rather than your own vehicle, the AMAP rates do not apply. Instead, your employer uses HMRC’s Advisory Fuel Rates (AFRs), which are updated quarterly and only cover fuel costs. From 1 March 2026, petrol rates range from 12p to 22p per mile depending on engine size, diesel from 12p to 18p, and electric vehicles are 7p (home charging) or 15p (public charging).
For a full breakdown, see our guide to HMRC advisory fuel rates 2026.
Keep Every Mile on Record
The HMRC mileage rate 2026 offers a valuable tax benefit — but only if you can prove your business miles with proper records. Whether you are an employee claiming mileage allowance relief or a self-employed sole trader deducting mileage from your profits, a complete and accurate mileage log is essential.
Download Tripbook to track your business miles automatically. The app logs each journey via GPS, lets you categorise trips with a single tap, and generates HMRC-ready reports — exactly what you need for your P87 form, Self Assessment return or MTD quarterly update.
