Tax & Expenses Guide · 2026/27

HMRC Business Mileage 2026/27 — Approved Rates, Claiming Relief & Advisory Fuel Rates

If you use your own car, van, motorcycle or bicycle for business journeys, HMRC allows you to claim a tax-free mileage allowance — or Mileage Allowance Relief if your employer pays less than the approved rate. This guide covers the 45p/25p car rates, how motorcycles and cycles are treated, Advisory Fuel Rates for company cars, how to keep a compliant mileage log, and exactly how to claim via Self Assessment or form P87.

Last updated: 21 June 2026How we verify

HMRC Approved Mileage Allowance Payments (AMAPs) 2026/27

HMRC sets Approved Mileage Allowance Payment (AMAP) rates — the amounts that employees and self-employed people can be paid (or can claim) per mile of business travel in their own vehicle without incurring Income Tax or National Insurance. These rates have remained unchanged since 6 April 2011.

The rates for 2026/27 are as follows:

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 (flat)
Cycles (pedal bikes)	20p per mile	20p per mile (flat)
Passenger (per additional employee carried)	5p per mile	5p per mile (flat)

The 10,000-mile threshold is per tax year (6 April to 5 April) and is counted across all employment. If you have two jobs and drive 6,000 miles for one and 5,000 for another in the same tax year, you have exceeded 10,000 miles in total — so 1,000 of those miles fall into the 25p band.

What Counts as a Business Journey?

Not every mile you drive is a qualifying business mile. HMRC draws a clear distinction between business travel (which qualifies for AMAP) and ordinary commuting (which does not).

Journeys that qualify

Travelling between your home and a temporary workplace (not your permanent place of work)
Visiting clients, suppliers or customers on behalf of your employer
Travelling between two separate permanent workplaces (if you have more than one)
Attending training or conferences away from your normal place of work
Making deliveries or collections as part of your job

Journeys that do NOT qualify

Your regular commute from home to your permanent place of work
Any personal journeys, including detours for personal errands during a business trip
Travel between home and a client's premises if that is actually your regular place of work

HMRC defines a temporary workplace as a place you attend for a limited duration or for a temporary purpose. If you attend a site for more than 24 months, or expect to, it becomes a permanent workplace and the journey becomes ordinary commuting. This is particularly relevant for contractors and consultants on long-term site placements.

Worked Examples: Calculating Your Mileage Claim

Example 1: Employee driving 14,000 business miles

Sarah is an employee who drives 14,000 business miles in her own car in 2026/27. Her employer pays her nothing towards her mileage. She is a basic-rate taxpayer.

First 10,000 miles × 45p = £4,500

Next 4,000 miles × 25p = £1,000

Total Mileage Allowance Relief = £5,500

Tax saving at 20% = £5,500 × 20% = £1,100 back in tax

Sarah claims £5,500 of Mileage Allowance Relief via form P87 (since she is not in Self Assessment). HMRC adjusts her tax code or sends her a cheque for £1,100.

Example 2: Employer pays below the AMAP rate

James is a sales rep who drives 12,000 business miles. His employer pays him 30p per mile (“below AMAP”). He is a higher-rate taxpayer (40%).

Approved amount: (10,000 × 45p) + (2,000 × 25p) = £4,500 + £500 = £5,000

Employer paid: 12,000 × 30p = £3,600

Mileage Allowance Relief claimable: £5,000 − £3,600 = £1,400

Tax saving at 40%: £1,400 × 40% = £560 back in tax

James claims relief on the £1,400 shortfall. His employer's 30p payments are tax-free because they are below the AMAP rate. James gets additional relief on the gap.

Example 3: Self-employed plumber using flat-rate mileage

Priya is a self-employed plumber who drove 9,500 business miles in 2025/26. She uses the simplified mileage method on her Self Assessment return.

9,500 miles × 45p = £4,275 deductible from profits

Tax saving at basic rate (20%): £4,275 × 20% = £855

NI saving (Class 4 at 6%): £4,275 × 6% = £256.50

Total tax and NI saving = £1,111.50

Priya enters £4,275 under “Motor expenses” on her SA103 form. She must continue using the flat-rate method for this van for its entire business life; she cannot switch to claiming actual costs in a future year.

Advisory Fuel Rates (AFRs) for Company Cars

Advisory Fuel Rates are different from AMAP rates. AFRs apply only to company-owned vehicles — they reimburse employees for fuel purchased out of their own pocket for business trips in a company car, or allow employers to calculate how much an employee owes for private use of a company car fuelled by the business.

AFRs are updated quarterly by HMRC. The current rates (from 1 June 2026) are:

Engine size	Petrol	Diesel	LPG
Up to 1400cc	14p	—	10p
1401cc–2000cc	17p	15p	12p
Over 2000cc	25p	20p	19p
Electric (any size)	7p per mile (Advisory Electric Rate)

If HMRC's AFR is lower than the actual fuel cost per mile (e.g. because pump prices have risen between quarterly updates), employers may pay a higher rate and treat the excess as non-taxable if they can demonstrate the higher figure is accurate. Check HMRC's website for the latest quarterly AFR update.

How to Claim: Employees (Form P87)

If you are an employee who has not been asked to complete a Self Assessment return, you claim Mileage Allowance Relief using form P87. You can submit P87 online via your Government Gateway personal tax account or by post.

What you need to complete P87

Your employer's PAYE reference (on your payslip or P60)
The total business miles driven in the tax year
The total mileage payments received from your employer (if any)
The tax year you are claiming for

Time limits and back-claiming

You can claim for the current tax year and the four preceding tax years. As of June 2026, this means you can still claim for 2022/23, 2023/24, 2024/25, and 2025/26, as well as the current 2026/27 year. The deadline for each year is 5 April four years after the end of that tax year (so 5 April 2027 for 2022/23 claims).

Important restriction: If your total claim across all work expenses for a given tax year exceeds £2,500, HMRC requires you to register for Self Assessment to claim that relief — you cannot use P87 alone. This threshold catches very high mileage claimants or those with multiple expense categories.

How to Claim: Self-Employed (Self Assessment)

Self-employed sole traders and partners in a partnership have two methods for claiming motoring costs:

Method 1: HMRC flat-rate mileage

Use the HMRC approved rates (45p/25p) and multiply by your business miles. This is the simplified expenses method under Finance Act 2013. Enter the result under “Motor expenses” on the SA103 Self Employment supplementary pages. Once you elect this method for a vehicle, you must stick with it for the life of that vehicle.

Method 2: Actual costs

Alternatively, claim a proportion of your actual motoring costs — fuel, insurance, road tax, servicing, MOT, tyres, parking (but not fines) — based on the business-use percentage. For example, if 60% of your total mileage is for business, you can deduct 60% of your total running costs. You can also claim capital allowances (writing-down allowance at 18% per year for the car) on the purchase cost, reduced by the private-use fraction.

Actual costs often produce a larger deduction for high-value cars, or for vehicles with low fuel economy where real costs exceed 45p per mile. For lower-cost, economical vehicles, the flat rate is typically easier and sufficient.

Tip: You cannot claim capital allowances if you use the flat mileage rate. The two methods are mutually exclusive for any given vehicle. If you switch a vehicle from actual costs to flat rate, HMRC treats any unrelieved capital allowances as remaining in the capital allowances pool until disposal.

Keeping a Compliant Mileage Log

HMRC can ask to see your mileage records during a tax enquiry. A compliant mileage log should record, for every business journey:

Date of the journey
Start and end locations (at minimum, the general area or purpose)
Business purpose of the journey
Miles driven (odometer readings are ideal but not mandatory)
Any passengers carried (for the 5p passenger payment)

Apps such as MileIQ, TripLog, and Driversnote automatically record trips via GPS and can export HMRC-compliant logs in spreadsheet format. Many accountants accept these exports directly. HMRC rarely prescribes a specific format — any consistent, contemporaneous record is acceptable.

Records must be retained for at least 6 years after the end of the relevant tax year (5 years from 31 January for self-employed). HMRC can raise a tax enquiry up to 4 years after the end of the tax year for careless errors, or up to 20 years in cases of deliberate understatement. Digital records (cloud backups of spreadsheets, app exports) are perfectly acceptable.

Mileage for Electric Vehicles

If you own a personally-owned electric vehicle and use it for business travel, the same AMAP rates apply: 45p per mile (first 10,000), then 25p. This is the same as for petrol or diesel cars. Electric vehicle owners arguably benefit more from the flat rate because their actual per-mile electricity cost (typically 4–8p per mile at home, or higher on public chargers) is well below the 45p AMAP rate.

For company-owned electric cars, the Advisory Electric Rate (AER) applies — currently 7p per mile. This is the rate for reimbursing employees for electricity they pay for themselves (e.g. charging at home) when using a company EV for business.

If your employer provides a company EV and also pays for all charging(including private use), no fuel benefit charge applies as long as the car's emissions are 0g/km CO2. However, if the company pays for home charging equipment, this may be a taxable benefit unless it falls under the workplace charging exemption.

Frequently Asked Questions

What is the HMRC mileage rate for cars in 2026/27?

HMRC's Approved Mileage Allowance Payment (AMAP) rate for cars and vans is 45p per mile for the first 10,000 business miles in the tax year, then 25p per mile for any miles above that threshold. These rates have been unchanged since April 2011. If your employer pays you less than these rates — or nothing at all — you can claim Mileage Allowance Relief (MAR) on the difference.

What are the HMRC mileage rates for motorcycles and bicycles?

The HMRC approved mileage rate for motorcycles is 24p per mile, with no higher rate for the first 10,000 miles — it is a flat 24p throughout. For cycles (pedal bikes), the rate is 20p per mile, also flat. These rates apply where the employer pays a mileage allowance for business use of a personally-owned motorcycle or bicycle.

How do I claim mileage relief as an employee who is not in Self Assessment?

Employees who are not required to submit a Self Assessment return can claim Mileage Allowance Relief using form P87 (Claim for tax relief for job expenses). You submit P87 to HMRC online (via your personal tax account) or by post. You can claim for the current tax year and up to four previous tax years. For claims over £2,500 per year, HMRC requires a Self Assessment return rather than P87.

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How does a self-employed person claim mileage on their tax return?

Self-employed sole traders can either use HMRC's simplified flat mileage rates (45p/25p) or claim actual motoring costs. If you use the flat-rate method, enter your total mileage allowance in the "Motor expenses" box on the SA103 Self Employment supplementary pages. Once you start using flat rates for a vehicle, you must continue with that method for the life of that vehicle — you cannot switch back to actual costs mid-way.

Can I claim an extra 5p per mile for a passenger?

Yes. If you carry a fellow employee in your own car on a business journey — and your employer approves it — you can claim an additional 5p per mile per passenger. This is called the Passenger Payment. It does not affect the standard 45p/25p rate you receive for the main mileage. The passenger payment is paid by the employer and is also free of tax and NI when paid at or below 5p per mile.

What are HMRC advisory fuel rates and who are they for?

Advisory Fuel Rates (AFRs) are set by HMRC for company car drivers — people who use an employer-owned vehicle for business travel. AFRs represent the fuel-only cost per mile and are used to reimburse employees for fuel they pay for personally on business trips, or to calculate how much employees owe when they use a company car for private travel. AFRs are updated quarterly and vary by engine size and fuel type. For June 2026, example AFRs for petrol cars are 14p (up to 1400cc), 17p (1401–2000cc), and 25p (over 2000cc).

What mileage records do I need to keep?

HMRC expects you to keep a mileage log recording: the date of each journey, the start and end location (or at least the purpose), the number of miles driven, and the business reason. In practice, a spreadsheet or a dedicated mileage-tracking app is sufficient. You must retain records for at least 6 years (5 years for sole traders from the 31 January filing deadline). HMRC can — and does — reject mileage claims where no log exists.

Is there a limit on how many miles I can claim at 45p?

The 45p rate applies to the first 10,000 business miles you drive in the tax year (6 April to 5 April), across all your employment or self-employment. After 10,000 miles the rate drops to 25p. There is no overall cap on the number of miles you can claim — only the rate change at 10,000 miles. If you have multiple jobs, the 10,000-mile threshold is shared across all of them.

Can I claim mileage if my employer already pays me something?

Yes, but only the difference up to the HMRC rate. If your employer pays you 30p per mile and the AMAP rate is 45p, you can claim Mileage Allowance Relief on the 15p difference. If your employer pays you the full 45p (or more), there is nothing to claim — and if your employer pays more than the HMRC rate, the excess is taxable income that should appear on your P11D or be reported through payroll.

Do mileage rates apply to electric vehicles?

For employees using a personally-owned electric vehicle for business travel, the same AMAP rates apply: 45p for the first 10,000 miles, 25p after. For company-owned electric cars, HMRC publishes a separate Advisory Electric Rate (AER) to reimburse the electricity cost. The AER from June 2026 is 7p per mile. Self-employed traders using the flat mileage method can also use 45p/25p for an electric car they own personally.

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Sources

Disclaimer: Mileage allowance rules depend on your employment status and circumstances. This guide is for general information. Advisory Fuel Rates change quarterly — always check HMRC's website for the current figures before reimbursing employees.