What is the HMRC Approved Mileage Rate for employees in 2026/27?

Full answer

The HMRC Approved Mileage Allowance Payment (AMAP) rates set the maximum amount an employer can pay an employee tax-free for using their own vehicle for business travel. The rates apply to cars and vans, with separate rates for motorcycles and bicycles. Car and van rates for 2026/27: - First 10,000 business miles in the tax year: 45p per mile - Above 10,000 business miles: 25p per mile Motorcycle rate: 24p per mile (no upper threshold) Bicycle rate: 20p per mile (no upper threshold) These rates are unchanged from recent prior years -- HMRC has not uplifted AMAP rates despite rising fuel and running costs, which is a point of criticism from many employee groups. How they work: If your employer pays you at or below the AMAP rate, there is no tax or NI to pay. If your employer pays you nothing, or less than the AMAP rate, you can claim Mileage Allowance Relief (MAR) for the shortfall through your Self Assessment return or by contacting HMRC directly. If your employer pays above the AMAP rate, the excess is taxable income and must be reported on your P11D or through payroll. Passenger payments: If you carry a fellow employee as a passenger on a business journey, you can receive an additional 5p per mile per passenger, tax-free -- provided the passenger is also making a business journey. Self-employed individuals: Sole traders and partners can also use mileage rates as an alternative to claiming actual vehicle expenses (fuel, insurance, servicing). Once you choose the mileage basis for a vehicle, you must continue to use it for that vehicle for as long as you own it. Record-keeping: You must keep a log of business journeys, including date, start and end points, business purpose, and mileage, to support any claim. HMRC can and does challenge mileage claims without adequate records.

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