Glossary · UK
What is Mileage Allowance Relief (MAR)?
Tax relief an employee can claim when their employer pays less than the approved mileage rates for business travel in their own vehicle.
Full Definition
Mileage Allowance Relief lets an employee claim tax relief when they use their own car, van, motorcycle or bicycle for business journeys and their employer pays them less than HMRC's approved amounts, or nothing at all. The approved mileage rates for cars and vans are 45 pence per mile for the first 10,000 business miles in the tax year and 25 pence per mile after that, with 24 pence for motorcycles and 20 pence for bicycles. You work out the approved amount for your business miles, subtract anything your employer has already paid you tax-free, and claim relief on the difference. The relief is given at your marginal rate of Income Tax, so a higher-rate taxpayer for 2026/27 saves 40% of the shortfall. Ordinary commuting to a permanent workplace does not count as business travel. Where the employer pays more than the approved rates, the excess is taxable. Claims can be made through Self Assessment or, for smaller amounts, on form P87, and you can usually go back up to four tax years.