How do HMRC mileage rates work for business travel in 2026?

Full answer

HMRC sets Approved Mileage Allowance Payment (AMAP) rates to allow employees and self-employed individuals to recover the cost of using their own vehicle for business travel. **2026 AMAP rates (unchanged since 2011)** - Cars and vans: 45p per mile for the first 10,000 miles; 25p per mile thereafter - Motorcycles: 24p per mile (all miles) - Bicycles: 20p per mile (all miles) These rates are the maximum you can receive tax-free from an employer. If your employer pays less (or nothing), you can claim Mileage Allowance Relief for the shortfall. **Employed staff: how to claim** If your employer does not reimburse you, or pays below AMAP rates, claim the difference via: - **P87 form** — for claims under £2,500 per year (online or postal) - **Self Assessment** — if you already file a tax return, include mileage relief on your employment expenses page **Self-employed: how to claim** Enter your total business mileage on your Self Assessment return. Multiply miles by the AMAP rate to get the deductible amount. You cannot also claim actual fuel or depreciation — it is one or the other (simplified expenses vs actual costs). **Passenger supplement** If you carry a fellow employee on a business trip, you can pay them 5p per mile tax-free per passenger. **Worked example** You drive 12,000 business miles in your own car in 2026/27. Allowable deduction: (10,000 × 45p) + (2,000 × 25p) = £4,500 + £500 = £5,000. If your employer paid 30p per mile (£3,600), you can claim relief on £1,400 via P87.

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