HMRC mileage rates for 2026/27
| Vehicle | Miles | Rate per mile |
|---|---|---|
| Car or van | First 10,000 business miles | 55p |
| Car or van | Each mile above 10,000 | 25p |
| Motorcycle | All business miles | 24p |
| Bicycle | All business miles | 20p |
| Passenger | Per qualifying passenger | 5p (car only) |
The car and van rate held at 45p from 2011 until 6 April 2026, when it rose to 55p for the first 10,000 business miles. The 25p rate above 10,000 miles, 24p for motorcycles and 20p for bicycles were left unchanged, so those three are still at their 2011 levels. The rates are intended to cover fuel, servicing, insurance, depreciation and all other running costs in a single per-mile figure.
Who can claim mileage
- Sole traders and partnerships — claim AMAP as a business expense on the Self Assessment return, reducing taxable profit pound-for-pound. Alternatively use the actual-cost method (more admin, occasionally better for expensive cars).
- Limited company directors and employees — the company reimburses you tax-free up to the AMAP rate. Any reimbursement above AMAP is taxable as a benefit in kind.
- Employees — claim Mileage Allowance Relief (MAR) through your tax return if your employer pays less than AMAP. You get tax relief at your marginal rate on the shortfall.
A freelancer driving 12,000 business miles in 2026/27 claims £5,500 for the first 10,000 miles (£0.55 × 10,000) plus £500 for the additional 2,000 miles (£0.25 × 2,000) — a £6,000 allowance total. For a sole trader at the 40% income tax band with 6% Class 4 NI, that’s £2,760 of tax saved.— GoForma technical team, 2026/27 tax year modelling
What counts as a qualifying business trip
HMRC allows mileage claims only for journeys that are "wholly and exclusively for business." Examples:
- Qualifies: visiting a client, travelling between two work sites in the same day, attending a conference, visiting a supplier, meeting for business that requires travel.
- Does not qualify: ordinary commuting between home and a permanent workplace; personal trips with minor business elements; detours on personal journeys.
- Grey area: temporary workplaces (less than 24 months or less than 40% of working time at a single site) generally qualify; "triangular travel" from home to a client direct is usually allowable.
Record-keeping requirements
HMRC requires contemporaneous evidence for every business journey:
- Date of the journey.
- Start and end location (postcode-level detail is ideal).
- Business purpose (e.g. "meeting with Acme Ltd re project kick-off").
- Miles driven.
- Passenger names if claiming the 5p supplement.
A phone-based mileage app, a notebook or a spreadsheet all work as long as you record trips as they happen. Retroactive reconstruction from calendar entries is common but less defensible in an enquiry.
AMAP vs actual-cost method
Sole traders and partnerships can choose between AMAP and the actual-cost method — claiming a proportion of all motoring costs (fuel, insurance, MOT, servicing, capital allowances) based on business-vs-private mileage ratio. Actual cost is more admin-heavy but can produce a larger claim for expensive cars with low annual mileage. Once you pick a method for a given vehicle, you must stick with it for as long as you own that vehicle.
AMAP is nearly always the right choice for:
- Moderate business mileage (under 10,000/year).
- Modest vehicles (under £25,000 purchase price).
- Anyone who wants simpler record-keeping.