HMRC Mileage Rates 2026/27
How much can you claim for business mileage? Explore the latest HMRC mileage allowance rates for cars, vans, motorcycles and bicycles, with a free calculator and practical guidance for employees, directors and the self-employed.
Updated November 2026. The 55p rate applies from 6 April 2026, including qualifying mileage earlier in the 2026/27 tax year.
What are the HMRC mileage rates for 2026/27?
For the 2026/27 tax year, HMRC's approved mileage rate is 55p per mile for the first 10,000 qualifying business miles in a car or van, followed by 25p for subsequent business miles. Motorcycles qualify for 24p per mile and bicycles for 20p per mile.
These rates are used for approved mileage allowance payments when employees use their own vehicles for business travel. Similar flat rates are available under simplified expenses for eligible self-employed businesses.
HMRC Mileage Rates: 2026/27 vs 2025/26
| Vehicle / mileage | 2026/27 | 2025/26 |
|---|---|---|
| Car or van: first 10,000 miles | 55p | 45p |
| Car or van: over 10,000 miles | 25p | 25p |
| Motorcycle: all business miles | 24p | 24p |
| Bicycle: all business miles | 20p | 20p |
| Qualifying employee passenger | 5p | 5p |
Rates are per business mile. The passenger rate is per qualifying passenger per mile and is separate from the driver's mileage allowance.
Do electric and hybrid cars qualify?
Yes. Employees using their own electric or hybrid cars for qualifying business journeys generally use the same approved car mileage rates. The method of propulsion does not change the 55p and 25p bands. Different rules apply to company vehicles.
HMRC Mileage Allowance Calculator
Calculate the approved mileage amount and, if applicable, an illustrative employee mileage tax-relief estimate.
Your mileage calculation
This calculator assumes the business miles entered are eligible and that the employer reimbursement relates to those journeys. Employee tax relief is calculated using a single selected marginal rate and is illustrative only. It does not calculate payroll National Insurance, personal allowance tapering or individual tax-band interactions. For sole traders, the approved amount is a potential expense deduction, not a direct tax refund. The passenger allowance is displayed separately and is not added to employee Mileage Allowance Relief. Company cars are excluded.
How much can you claim for 12,000 miles?
Suppose an employee drives 12,000 qualifying business miles in their own car during the 2026/27 tax year.
| Calculation | Amount |
|---|---|
| 10,000 miles × 55p | £5,500 |
| 2,000 miles × 25p | £500 |
| Total approved amount | £6,000 |
If the employer reimburses £3,600, the unreimbursed approved amount is £2,400. An employee eligible for Mileage Allowance Relief might receive an illustrative £480 Income Tax saving at 20%, assuming the whole amount qualifies for relief at that rate.
By comparison, the same 12,000 business miles in 2025/26 would produce an approved amount of £5,000.
Mileage Claims for Employees, Directors and Sole Traders
Employees
An employer can reimburse qualifying business mileage in an employee's own vehicle up to the approved amount without Income Tax under the relevant mileage allowance rules.
Where payments fall short, eligible employees may claim Mileage Allowance Relief on the difference.
Company directors
Directors using their personally owned cars for company business can generally receive approved mileage reimbursements under the employee rules.
The company should keep appropriate records and distinguish business travel from ordinary commuting.
Sole traders
Eligible sole traders can use simplified mileage expenses instead of actual vehicle running costs.
This reduces taxable business profits rather than providing a pound-for-pound refund from HMRC.
What Counts as Business Mileage?
Qualifying business travel generally involves journeys undertaken in the performance of employment duties or eligible travel to temporary workplaces.
Common qualifying examples
- Travelling between business clients
- Visiting qualifying temporary workplaces
- Travelling to supplier meetings
- Business journeys to other work locations
Usually excluded
- Ordinary home-to-permanent-workplace commuting
- Personal shopping and leisure journeys
- Private detours during business travel
How to Keep HMRC Mileage Records
A mileage log should make it possible to verify the journeys claimed. Record the following information:
- Date of each journey
- Starting and destination postcodes
- Business purpose of the journey
- Qualifying business miles travelled
- Vehicle used
- Reimbursement received, if any
A spreadsheet, digital mileage tracker or well-maintained written record may be suitable. Keep supporting evidence where appropriate.
Businesses should normally retain appropriate tax records for the applicable statutory period. Record retention requirements differ depending on whether you are an employee, sole trader or limited company.
Mileage Rates vs Actual Vehicle Costs
For eligible self-employed businesses, simplified mileage expenses offer an alternative to calculating the business proportion of actual vehicle costs.
| Flat-rate mileage method | Actual-cost method |
|---|---|
| Based on eligible business miles | Based on qualifying vehicle costs |
| Includes ordinary running costs | Requires expense records and allocation |
| Generally simpler to calculate | May suit higher-cost vehicles |
| Cannot also deduct fuel and servicing covered by the rate | Business-use proportion of allowable costs may be claimed |
Once simplified mileage expenses are selected for a vehicle, the method generally continues while that vehicle is used in the business. You cannot use simplified mileage expenses for a vehicle where capital allowances or certain other deductions have already been claimed.
Eligible parking, tolls and other separately allowable business travel expenses may be claimable in addition to simplified vehicle mileage costs.
Company Cars and HMRC Advisory Fuel Rates
The 55p and 25p approved mileage rates are not the standard reimbursement rates for fuel used in company-owned cars.
Company cars generally fall under separate advisory fuel or electricity reimbursement arrangements. Those rates can depend on the fuel type, engine size and applicable period, and HMRC reviews them periodically.
Electric company cars also have specific advisory electricity rates. These should not be confused with the approved mileage rates for employees using personally owned electric cars.
How to Claim Mileage Tax Relief from HMRC
- Identify qualifying journeys. Exclude ordinary commuting and private travel.
- Calculate the approved amount. Apply the correct vehicle rates for the relevant tax year.
- Deduct employer reimbursements. Calculate any eligible unreimbursed approved mileage amount.
- Keep supporting records. Maintain journey dates, reasons, start and end postcodes and mileage.
- Claim using the appropriate route. Employees may use HMRC's employment expense claim process, while those completing Self Assessment generally claim through their tax returns.
Sole traders using simplified expenses instead include the qualifying mileage deduction in their business expense calculations for Self Assessment.
See our guide to filing a Self Assessment tax return and our tax-deductible expenses guide.
HMRC Mileage Rates FAQs
What is the HMRC mileage rate for 2026/27?
The approved rate is 55p per mile for the first 10,000 qualifying business miles in a car or van and 25p per mile thereafter. Motorcycle and bicycle rates are 24p and 20p respectively.
When did the 45p mileage rate increase?
The rate increased to 55p for the first 10,000 car or van business miles from 6 April 2026. The increase was introduced retrospectively for the 2026/27 tax year.
Can I claim 55p per mile for an electric car?
Yes, qualifying business journeys in an employee's own electric car generally use the same approved mileage rates as petrol and diesel cars. Company cars are subject to different reimbursement rules.
Can I claim mileage from home to work?
Ordinary commuting to a permanent workplace is generally excluded. Some journeys to temporary workplaces may qualify. Working from home does not automatically make every journey a business journey.
Is mileage allowance tax-free?
Qualifying employee mileage payments within the approved amount can generally be paid free of Income Tax. Payments above the approved amount may create taxable excess mileage payments. National Insurance rules require separate consideration.
Can I claim fuel as well as mileage?
Normally not where the mileage rate already covers the vehicle's ordinary running costs. Eligible additional parking and toll expenses may be treated separately.
Can sole traders use the HMRC mileage rates?
Eligible sole traders and qualifying partnerships can use simplified mileage expenses for certain vehicles. Limited companies cannot use the simplified expenses scheme.
What happens after 10,000 business miles?
The approved rate for cars and vans falls to 25p for subsequent business miles in the same tax year. The threshold is not reset for each journey or each car used within the same relevant employment.
Can I claim mileage for carrying colleagues?
Employers may pay an additional tax-free passenger amount of 5p per passenger per business mile for qualifying fellow employees travelling in a car or van on a work journey. Employees cannot claim tax relief merely because this passenger allowance was not paid.
Is mileage relief a refund of the full mileage amount?
No. Employee Mileage Allowance Relief provides Income Tax relief on an eligible shortfall, not a refund of that shortfall in full. Self-employed simplified mileage expenses reduce taxable business profits rather than creating a direct reimbursement.
Related Tax and Accounting Guides
Business mileage can affect payroll, company accounts, bookkeeping and personal tax returns. These related resources may help:
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Reviewed November 2026 by The Online Accountants, a trading name of Parkinson (UK) Limited. This guide provides general UK tax information. Individual circumstances and statutory eligibility rules determine the correct treatment of mileage expenses and claims.