HMRC Mileage Rates and Allowances 2026: The Complete UK Guide

Claiming Business Mileage Allowance

HMRC mileage rates have stayed the same since 2011. In that time, fuel and running costs have gone up, but the rates have not. As a result, many UK workers miss out on money they are entitled to claim. If you drive for work and fail to claim correctly, you could lose hundreds or even thousands in tax relief each year.

This guide applies to a wide range of people across the UK. If you are an employee using your own car for work, self employed and travelling to clients, a contractor working outside IR35, or a limited company director paying for business journeys, this directly affects your take home income.

In this article, you will get the latest HMRC mileage rates and allowance for 2026, steps on how to claim, practical examples, common mistakes that cost money, and simple ways to increase your tax savings without risking compliance issues.

What are HMRC mileage rates and why do they matter?

When you use your own vehicle for work, HMRC allows you to claim a fixed amount per mile instead of tracking every cost. This is called the Approved Mileage Allowance Payment (AMAP).

Here is the key point most people miss:

• Mileage Allowance Payments (MAPs) are what your employer actually pays you. They can choose any rate.
• Approved Mileage Allowance Payments (AMAPs) are the HMRC-approved tax-free limits.

If your employer pays you at or below the AMAP rate, you pay no tax or National Insurance, and you do not need to report it.

AMAP is designed to keep things simple. It covers:

• Fuel or electricity
• Oil and servicing
• Tyres
• Insurance
• General wear and tear

It does not cover extras like parking or tolls. You claim those separately as business expenses.

Who can claim mileage allowance?

This applies to most people who use their own vehicle for work, including:

• Employees in PAYE jobs who make business trips
• Freelancers and sole traders claiming vehicle costs on Self Assessment
• Contractors and limited company directors reimbursing themselves through their company
• NHS staff, teachers, tradespeople, and anyone else who regularly drives to client sites, meetings, or temporary workplaces

If you drive for work and use your own vehicle, this is one of the easiest ways to reduce your tax bill without complicated calculations.

Who Cannot Claim?

Not all travel qualifies for mileage allowance. HMRC has strict rules on what counts as business mileage.

• Commuting to a permanent workplace
  Travel between your home and your regular place of work is classed as personal commuting. This is not tax deductible, even if you travel daily.
• Personal travel
  Any journey that is not directly related to business activities cannot be claimed. This includes trips for shopping, holidays or personal errands.

What Vehicles are Covered?

HMRC mileage rates apply to various personal vehicles used for work, including:

Cars and Vans
Motorcycles
Bicycles

Each vehicle type has its own rate per mile, designed to cover typical running costs associated with business travel. Just a heads up: commuting between your home and your regular workplace doesn’t count, you can only claim for journeys that are business-related.

Both self employed and employees can claim business mileage.

What Do these Rates Cover?

The mileage allowance is designed to reflect the real cost of running a vehicle for work. It includes:

• Fuel or electricity
• General wear and tear
• Servicing and repairs
• Insurance
• Road tax and depreciation

So when you claim mileage using HMRC rates, you are not just claiming fuel. You are covering the full cost of using your vehicle for business travel.

HMRC approved mileage rates for 2026

AMAP rates for employee-owned vehicles (2025/26 and 2026/27 tax years)

Passenger rate

If you carry a colleague on the same business trip, you can claim an additional 5p per mile per passenger. That is on top of the vehicle rate above, so it increases your total claim without changing anything else.

Electric vehicles

If you use your own electric car for work, HMRC applies the same AMAP rates as any other car.

That means:

• 45p per mile for the first 10,000 miles
• 25p per mile after that

There is no separate or reduced rate for electric vehicles. Your personal EV is treated exactly the same as a petrol or diesel car under AMAP rules, which often surprises many EV drivers.

How rates have changed over time

GoForma tip: These rates are confirmed by HMRC's official guidance, last updated 1 May 2026. Always check GOV.UK or speak to your accountant before filing a mileage claim to use the most up-to-date figures.

What is Mileage Allowance?

Mileage allowance is a fixed amount you can claim for each mile you travel for work using your own vehicle.

Instead of claiming separate costs like fuel, servicing or insurance, you use a AMAP rate per mile to cover everything.

In simple terms

If you drive your own car for business, mileage allowance lets you claim money back or reduce your tax based on how many miles you travel.

Quick example

If you drive 1,000 business miles and the rate is 45p per mile, you can claim £450 as mileage allowance.

That amount either gets paid to you by your employer or reduces your taxable profit if you are self employed or run a limited company.

Difference Between Mileage Rate and Mileage Allowance

The mileage rate or AMAP rate is the fixed amount HMRC sets for each mile you travel for business. For example, if you’re driving a car, the rate could be 45p per mile for the first 10,000 miles in a tax year.

On the other hand, the mileage allowance is the total amount you can claim based on the number of business miles you drive. So, if you drive 5,000 business miles in a year, your allowance would be 5,000 x 45p = £2,250.

How to Calculate Mileage Allowance

The calculation is simple: multiply your business miles by the mileage rate.

It only changes once you pass 10,000 miles in a tax year, because the rate drops after that point:

Total claim = (10,000×0.45) + ((x−10,000)×0.25)

Up to 10,000 miles, you claim 45p per mile. Any miles above that are claimed at 25p per mile.

The formula:

• Up to 10,000 miles: Business miles × 45p = tax-free reimbursement
• Above 10,000 miles: First 10,000 × 45p, then remaining miles × 25p

Example 1: Employee driving 8,000 business miles

8,000 miles × 45p = £3,600 (fully tax-free)

Example 2: Employee driving 14,000 business miles

• First 10,000 miles: 10,000 × 45p = £4,500
• Remaining 4,000 miles: 4,000 × 25p = £1,000
• Total: £5,500 tax-free

Example 3: Driver with a passenger colleague for 5,000 miles

• Car rate: 5,000 × 45p = £2,250
• Passenger rate: 5,000 × 5p = £250
• Total claimable: £2,500

What counts as business mileage?

This is where many people get it wrong. HM Revenue & Customs has clear rules on what qualifies as a business journey.

This counts as business mileage

• Travelling between workplaces to do your job
• Visiting a client, customer, or supplier
• Going to a training event or business meeting away from your usual workplace
• Travelling to a temporary workplace (one you use for less than 24 months)

This does NOT count

• Your normal commute from home to your main workplace
• Personal errands during the day
• Travel between home and a fixed office, even if you sometimes work from home

The biggest mistake is claiming your daily commute. Even if you drive your own car every day, HMRC treats that as personal travel, not business mileage.

Keep your commuting miles separate from your business miles to avoid problems.

If you want a quick and accurate estimate, use GoForma’s mileage claim calculator or speak to the team to get your claim set up properly.

HMRC mileage rates for employees: how to claim

As an employee, what you can claim depends on what your employer pays you. HMRC sets the tax-free limit through AMAP rates.

If your employer pays the full AMAP rate

If you receive 45p per mile (up to 10,000 miles), you are already at the approved limit.

• No tax to pay
• Nothing to report
• Nothing extra to claim

The payment is fully tax-free.

If your employer pays less than the AMAP rate

This is very common. Many employers pay 25p, 30p, or 35p per mile.

In this case, you can claim Mileage Allowance Relief (MAR).

MAR gives you tax relief on the difference between:

• What your employer paid you
• What HMRC allows as tax-free

You do not claim the full difference as cash. You claim tax relief on that shortfall, which still puts money back in your pocket.

Example:

Your employer pays you 30p per mile. You drove 6,000 business miles. HMRC's approved rate is 45p.

• Approved amount: 6,000 × 45p = £2,700
• Employer paid: 6,000 × 30p = £1,800
• Shortfall eligible for relief: £900

You can claim tax relief on that £900 shortfall. As a basic rate taxpayer, that is worth £180 back. As a higher rate taxpayer, it is worth £360.

How to claim Mileage Allowance Relief (MAR):

1. If you file a Self Assessment tax return, claim your Mileage Allowance Relief under employment expenses.
2. If you are PAYE only and do not complete Self Assessment, use HMRC's P87 form to claim relief online or by post.
3. You can claim for the current tax year and up to 4 previous tax years. If you have been underpaid for years, this is worth going back and checking.

If your employer pays you more than the AMAP rate

If your employer pays more than the AMAP rate, the extra is treated as taxable income by HMRC.

Your employer must report the excess on a P11D and pay Class 1A National Insurance on it. You will then pay income tax on the amount above the approved rate.

Record-keeping as an employee

Keep a clear mileage log throughout the year. HMRC does not require a set format, but your records should include:

• Date of each journey
• Start point and destination
• Business reason for the trip
• Number of miles driven
• Vehicle used

You do not need to record odometer readings, but your log should stay consistent and detailed. Good records make it easy to support your claim if HMRC ever asks questions.

HMRC mileage rates for the self-employed and limited company directors

Self-employed and sole traders

If you are self-employed, you have two ways to claim vehicle costs on your Self Assessment tax return:

Option 1: Simplified expenses (flat mileage rate)

Use the AMAP rates set by HMRC (45p/25p per mile) and multiply them by your business miles. Enter this total in your Self Assessment under business expenses.

You cannot claim fuel, repairs, insurance, or depreciation separately when using this method. The mileage rate already includes all of those costs.

Best for: lower annual mileage, newer or lower-cost vehicles, or anyone who wants a simple, hassle-free approach.

Option 2: Actual costs method

Track all your vehicle costs, including fuel, servicing, MOT, road tax, insurance, breakdown cover, and any finance interest. Then work out what percentage of your total mileage is for business and apply that percentage to your total costs.

For example, if 60% of your driving is for business, you can claim 60% of your total running costs.

Best for: high mileage, expensive vehicles, or anyone comfortable keeping detailed records.

Important rule from HMRC:

once you choose this method for a vehicle, you must stick with it. You cannot switch between mileage rates and actual costs later for the same vehicle, so choose carefully at the start.

Watch a short video by HMRC on what motoring expenses can I claim if I'm self-employed?

Limited company contractors and directors

If you operate through a limited company, the process works a bit differently.

Your company can reimburse you for business mileage in your own vehicle using the AMAP rates set by HMRC. Those reimbursements are a tax-deductible business expense for the company, and they are tax-free in your hands.

• The payment is a business expense for your company
• It reduces your Corporation Tax bill
• It is tax-free in your hands

You do not claim this through your personal Self Assessment. Instead:

• Keep a mileage log
• Submit the claim through your company’s expense process
• Get reimbursed by your company

Your company then records and deducts that cost in its accounts.

This is a simple and tax-efficient way to take money out of your company while staying fully compliant, and it is one that GoForma's contractor accountants help hundreds of contractors take full advantage of every year.

Flat Rate Mileage vs Actual Costs

‍Pro Tip: Use accounting software like FreeAgent or Xero which makes logging mileage a breeze. Plus, GoForma clients get FreeAgent for free, which can save you time and help you stay organised!

Mileage claims compared: self-employed vs employees vs limited company directors

24 Month Rule for Business Mileage

The 24-month rule is a guideline from HMRC that helps determine if travel to a workplace qualifies as business mileage. This rule is particularly relevant for those who travel to temporary workplaces, like contractors, agency workers, or employees on short-term assignments.

This rule is important because it affects whether you can claim tax-free mileage for travel to and from a workplace.

How the 24-Month Rule Works

According to HMRC, a workplace is considered temporary if:

• You expect to work there for less than 24 months
• You spend less than 40% of your working hours at that location

If both of these conditions are met, you can claim a mileage allowance for your travel between home and that site, as it’s considered a business journey.

However, if your time at that workplace exceeds 24 months or you find yourself spending more than 40% of your working time there, HMRC will classify it as a permanent workplace. In this scenario, your travel to and from the site is viewed as a regular commute, and you won’t be able to claim mileage for it.

Example of the 24-Month Rule

Imagine you start working at a client’s site for 2 days a week and expect to be there for 18 months. This qualifies as a temporary workplace, so you can claim mileage for your business travel.

But if your contract extends beyond 24 months, or if you begin working there more frequently (over 40% of your time), then the workplace will be considered permanent. At that point, you’ll need to stop claiming business mileage for trips to that location.

Advisory fuel rates 2026: what company car users need to know

If your employer provides you with a company car, the AMAP rates above do not apply to you. Instead, you use Advisory Fuel Rates (AFRs).

AMAP is for personal vehicles, while AFR is only for company cars. Mixing the two is one of the most common issues flagged in HMRC compliance checks.

What advisory fuel rates are for

AFRs serve two purposes:

1. Employers reimbursing employees for business travel in a company car
2. Employees repaying their employer for fuel used on private journeys in a company vehicle

How the tax works

• If payments stay at or below the AFR, there is no tax and no National Insurance
• If payments go above the AFR without clear evidence of higher costs, the extra amount becomes taxable

How Frequently Do the Rates Change?

HMRC reviews and updates these rates quarterly in March, June, September, and December. This ensures that the rates stay aligned with the fluctuations in fuel prices.

You can always check the latest rates on the official HMRC website.

HMRC advisory fuel rates from 1 March 2026

HMRC reviews advisory fuel rates every quarter. The rates effective from 1 March 2026 are:

Petrol and LPG cars:

Diesel cars:

Electric cars:

The next scheduled AFR update is 1 June 2026.

Mileage record-keeping: what HMRC expects and how to avoid penalties

Claiming mileage is completely valid, but your records must support it. HMRC treats incorrect or careless claims seriously.

If your records are wrong or cannot be backed up, penalties can be high; in some cases up to £3,000 per incorrect record where HMRC finds fraud or carelessness.

What your mileage log must include

HMRC does not require a fixed format, but your mileage log should clearly record:

• Date of each journey
• Start and end location
• Business purpose (e.g. "Client meeting at ABC Ltd, London")
• Miles driven
• Vehicle used (especially relevant if you use more than one vehicle)

You do not need to record odometer readings, though some accountants recommend doing so as extra evidence.

How long to keep your records

• Self-employed: keep records for at least 5 years after the Self Assessment deadline
• Employees: keep records for at least 6 years in case of an HMRC check

Making Tax Digital (MTD) and digital mileage records

From April 2026, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) requires self-employed individuals and landlords above the £50,000 income threshold to keep business records digitally. If you fall into that bracket, your mileage log must be in a digital format from this point onwards.

Even if you are not yet in scope for MTD, switching to digital records is a smart move. Paper logs are easy to lose and harder to check later.

Recommended ways to track mileage

• Dedicated mileage apps (such as MileIQ, Driversnote, or TripLog) automatically track trips via GPS and let you categorise them as business or personal
• Spreadsheets work well if you are methodical and update them daily
• Accounting software with built-in mileage tracking (GoForma uses software that integrates expenses and mileage in one place)

The golden rule is to log your journeys at the time, not from memory weeks later. HMRC is experienced at spotting reconstructed mileage logs, and inaccurate records, even unintentional ones, can trigger a compliance check.

Ready to claim every mile you owe?

HMRC mileage rates and allowances are one of the most consistently underused tax reliefs available to UK workers, contractors, and self-employed professionals. The rates are set, the rules are clear, and the money is there to be claimed. You just need to track your journeys properly and file your claim the right way.

At GoForma, our specialist accountants for self employed work with employees, freelancers, and limited company contractors every day to make sure their mileage claims are accurate, compliant, and maximising every allowance available to them. From setting up your mileage tracking system to filing your Self Assessment return and managing your company's expense policy, we have you covered.

Speak to a GoForma accountant today and see how much you could be claiming. You might be leaving more money on the table than you think.

FAQs on Mileage Rates and Allowance

What is the HMRC mileage rate for 2026?

The HMRC approved mileage rate for cars and vans in 2026 is 45p per mile for the first 10,000 business miles in a tax year, and 25p per mile for every mile above that. Motorcycles are reimbursed at 24p per mile throughout. Bicycles are reimbursed at 20p per mile throughout. These rates apply when you use your own vehicle for work.

Can I claim 45p per mile if I drive an electric car?

Yes. If you drive your own personal electric car for business, you claim at exactly the same AMAP rate as any other car: 45p for the first 10,000 miles and 25p above that. The separate Advisory Electric Rates (7p/15p per mile) only apply to company-owned electric cars.

What happens if my employer pays less than the HMRC mileage rate?

If your employer pays below the approved 45p rate, you can claim the shortfall back as Mileage Allowance Relief (MAR). You claim this via your Self Assessment tax return or, if you are PAYE only, through HMRC's P87 form. You can claim for the current tax year and up to four previous years.

Can I claim mileage on my Self Assessment tax return?

Yes. Self-employed individuals claim business mileage under vehicle expenses on their Self Assessment return, using the HMRC simplified expense rates (45p/25p per mile). Employees who have not been fully reimbursed by their employer can also claim Mileage Allowance Relief through Self Assessment.

What is the difference between AMAPs and advisory fuel rates?

AMAPs (Approved Mileage Allowance Payments) apply when you use your own personal vehicle for work. Advisory Fuel Rates (AFRs) apply when you drive a company-owned car. AMAPs are higher because they cover all vehicle running costs. AFRs only cover fuel. Using the wrong rate is a common compliance error. If you are unsure, speak to your accountant.

Do I pay tax on mileage payments from my employer?

Not if your employer pays at or below the HMRC AMAP rate. Those payments are entirely tax-free. If your employer pays above the approved rate, the excess is treated as taxable income and must be reported on a P11D.

How do I keep a HMRC-compliant mileage log?

Record each journey with: the date, start and end location, business purpose, and miles driven. Update your log at the time of travel, not from memory afterwards. Keep records for at least five years. From April 2026, if you are in scope for Making Tax Digital, your mileage records must be kept in a digital format.

Can I claim mileage if I use my personal car for work?

Yes. You can claim mileage if you use your own car for business travel such as visiting clients or travelling between workplaces. You cannot claim for your normal commute.

Can I claim both mileage and fuel costs?

No. Mileage rates already include fuel, servicing, insurance, and wear and tear. You cannot claim these costs separately if you use the mileage method.

What is Mileage Allowance Relief (MAR)?

Mileage Allowance Relief is tax relief you claim if your employer pays less than HMRC mileage rates. You receive tax relief on the difference, not the full amount.

Can I switch between mileage and actual costs?

No. Once you choose a method for a vehicle, you must sticNo. Once you choose a method for a vehicle, you must continue using it for that vehicle.

Are HMRC mileage rates tax-free?

Yes. Payments at or below HMRC rates are tax-free. Any amount above the approved rate is treated as taxable income.

Who can claim HMRC mileage allowance?

You can claim mileage allowance if you are an employee using your own vehicle for work, self-employed individual, or a contractor running a limited company.

Do HMRC mileage rates include maintenance and insurance?

Yes. The mileage rate covers fuel, maintenance, insurance, and general running costs in one single figure.

Do I need to keep receipts?

You don’t need fuel receipts when claiming mileage using HMRC’s approved mileage rates, as these rates cover fuel, wear and tear, and running costs. But if you're claiming actual fuel costs instead of mileage rates, then receipts are needed to back up your claim.

What vehicles are eligible for mileage allowance?

You can claim mileage allowance for cars, vans, motorcycles, and bicycles used for business travel. The vehicle must be personally owned or leased by you, not provided by your employer. Company cars have different rules and usually follow fuel rates, not mileage allowance.

Do electric vehicles qualify?

Yes, electric vehicles qualify for mileage allowance. HMRC sets an advisory electricity rate for fully electric cars, which covers the cost of charging during business travel. You can claim this rate per mile if you use your own electric vehicle for work-related journeys.

Resources:

https://www.gov.uk/government/publications/rates-and-allowances-travel-mileage-and-fuel-allowances/travel-mileage-and-fuel-rates-and-allowances

https://www.gov.uk/guidance/advisory-fuel-rates

https://www.legislation.gov.uk/ukpga/2003/1/section/229

https://www.gov.uk/employer-reporting-expenses-benefits/reporting-and-paying

Disclaimer:

This article is for general information only and does not constitute tax advice. Tax rules can change and individual circumstances vary. Always speak to a qualified accountant or tax adviser for guidance specific to your situation.