UK Business Mileage HMRC Rates 2026/27: Claim the Right Amount

What Are HMRC Approved Mileage Allowance Payments?

When you use your own vehicle for business travel, HMRC allows you to claim a set rate per mile to cover fuel, wear and tear, insurance and other running costs. These are called Approved Mileage Allowance Payments, or AMAPs.

AMAPs are not the same as reimbursing actual fuel costs. They are a flat rate that HMRC deems to cover all motoring expenses, which simplifies record-keeping and avoids the need to provide receipts for every fuel purchase.

The rates apply whether you are an employee claiming from your employer or a self-employed person using simplified expenses. If your employer pays you at or below the AMAP rate, there is no tax or National Insurance liability on that payment. Pay above the rate and the excess becomes a taxable benefit.

HMRC Mileage Rates 2026/27

Cars and Vans

The car and van rate has remained unchanged for many years:

• First 10,000 miles per tax year: 45p per mile
• Above 10,000 miles per tax year: 25p per mile

The 10,000-mile threshold resets each April at the start of a new tax year. If you drive 15,000 business miles in 2026/27, you would receive 45p x 10,000 miles = £4,500 plus 25p x 5,000 miles = £1,250, giving a total AMAP of £5,750.

Motorcycles

Motorcycles attract a flat rate of 24p per mile with no higher rate for the first 10,000 miles and no drop after that. The same 24p applies throughout the year regardless of total mileage.

Bicycles

Pedal cycles are covered at 20p per mile. This rate applies to conventional pedal bikes as well as electric-assist bicycles that fall within the statutory definition (motor up to 250W, maximum assisted speed 25km/h).

Electric Vehicles

HMRC also publishes separate Advisory Fuel Rates (AFRs) for company car drivers reclaiming fuel costs from their employer. The AFR for electric company cars is currently 4p per mile. However, AFRs only apply to company-owned vehicles, not personal cars. If you drive your own EV on business, you use AMAP (45p/25p), not the 4p advisory rate.

How Employees Claim Mileage Allowance Relief

If your employer pays you less than the AMAP rate -- or nothing at all -- you can claim Mileage Allowance Relief (MAR) for the shortfall. This reduces your taxable income.

Example: You drive 8,000 business miles and your employer pays 30p per mile. AMAP entitlement = 8,000 x 45p = £3,600. Employer paid = 8,000 x 30p = £2,400. MAR claimable = £1,200.

If you are a 20% taxpayer, that £1,200 MAR saves you £240 in income tax. A 40% taxpayer saves £480.

How to Claim

• Via self-assessment: Report the shortfall on your tax return under employment expenses
• Via form P87: For employees who do not file self-assessment and the claim is under £2,500 in a tax year. Submit online through your HMRC personal tax account or by post

You can claim MAR going back up to four tax years, so if you have been underpaid in previous years it is worth checking whether you have unclaimed relief.

Passenger Payments

If you carry fellow employees as passengers on approved business journeys, you can claim an additional 5p per mile per passenger on top of your standard AMAP.

Example: You drive 200 business miles with two colleagues in your car. In addition to your normal 45p x 200 = £90, you can claim 5p x 200 x 2 passengers = £20. Total approved payment = £110.

This additional rate does not count towards the 10,000-mile threshold -- only your personal business mileage does.

P11D Implications When Employers Pay Above AMAP

If your employer reimburses mileage at a rate above AMAP -- for instance 60p per mile rather than 45p -- the excess is a taxable benefit. The employer must report it on form P11D and pay Class 1A National Insurance on the amount.

Example: Employer pays 60p per mile, AMAP is 45p. You drive 5,000 miles. Total employer payment = £3,000. AMAP entitlement = £2,250. Excess = £750, which is reportable on P11D and taxable as employment income.

Some employers negotiate higher rates to attract staff in roles requiring heavy travel, but they should be aware of the P11D obligations.

Self-Employed: Simplified Expenses

Self-employed people and sole traders can use the same AMAP rates as simplified expenses when calculating business mileage costs for their tax return. This avoids the need to claim actual vehicle costs such as fuel, insurance, road tax, repairs and depreciation separately.

The rates are identical: 45p per mile for cars and vans up to 10,000 miles per year, then 25p. Motorcycles 24p. Bicycles 20p.

Once you have chosen the simplified expenses method for a vehicle, you cannot switch to claiming actual costs for the same vehicle in a later year. If your actual running costs are very high -- for example a high-value car with expensive servicing -- actual costs may be more beneficial, but you would need to apportion private versus business use.

Keeping a Mileage Log

To substantiate any mileage claim, HMRC expects you to maintain contemporaneous records. A compliant mileage log should include:

1. Date of each journey
2. Start and end location (or postcode)
3. Purpose of the journey (business reason)
4. Miles travelled
5. Cumulative annual mileage total

HMRC can request records up to six years back, so paper logs or a spreadsheet should be kept securely. Many drivers use apps that automatically track GPS routes, which can then export mileage summaries. These are acceptable as long as the records are accurate and show the business purpose.

Commuting from home to a permanent workplace does not count as business mileage. However, travel from home to a temporary workplace or between workplaces can qualify.

Advisory Fuel Rates for Company Car Users

AFRs are separate from AMAPs and apply only when an employee is repaying their employer for private fuel used in a company car, or when an employer reimburses only the fuel element for business travel in a company car.

Current 2026/27 AFRs are typically updated by HMRC quarterly. For a petrol car up to 1400cc the rate is currently around 13p-14p per mile. Diesel and larger engines attract higher rates. Electric company cars attract 4p per mile.

These rates are not for personal vehicle claims -- do not confuse AFRs with AMAPs when claiming for your own car.

Frequently Asked Questions

Can I claim both fuel costs and the AMAP rate? No. If you use simplified expense AMAP rates, those are intended to cover all vehicle running costs including fuel. You cannot claim actual fuel on top.

Does commuting to my regular office count as business mileage? No. Commuting from home to your normal place of work is not classed as business travel. Only travel to temporary workplaces or between work locations qualifies.

What if I use my personal electric car for business? You claim AMAP at 45p per mile for the first 10,000 miles, then 25p -- the same as a petrol car. The 4p AFR does not apply to personal vehicles.

Can I claim mileage if my employer provides a fuel card? If your employer pays for all fuel via a fuel card, you cannot separately claim AMAP because your fuel costs are already covered. Check with your employer what their policy is on business mileage reimbursement.

How far back can I claim Mileage Allowance Relief? You can claim MAR up to four tax years back. For 2026/27 you could still claim for 2022/23, 2023/24, 2024/25 and 2025/26.

Do motorcycle mileage rates drop after 10,000 miles? No. Motorcycles attract a flat 24p per mile regardless of total annual mileage -- there is no higher rate threshold for bikes.

What records does HMRC require for mileage claims? Date, origin, destination, business purpose and miles for each trip. Contemporaneous records are expected -- reconstructing a full year from memory after the fact is risky if HMRC investigates.

Can I claim passenger payments if I give a colleague a lift? Yes, but only if you and the passenger are travelling on the same approved business journey. The extra 5p per mile per passenger applies on top of your normal AMAP rate.

Is there a mileage limit for self-employed simplified expenses? No annual mileage cap exists, but you must consistently use simplified expenses once chosen for a vehicle. You cannot switch between simplified and actual costs year to year for the same vehicle.

My employer pays nothing per mile -- can I still claim? Yes. If your employer pays zero, you can claim the full AMAP rate as MAR. Claim via self-assessment or form P87 depending on your situation.