Guide

HMRC mileage allowance 2026/27: rates and how to claim

If you use your own car, van, motorcycle or bicycle for work, HMRC lets you claim a fixed amount per business mile instead of your actual running costs. The rate for cars and vans went up for the first time since 2011 on 6 April 2026. This guide gives the rates for the 2026/27 tax year, explains how a sole trader and an employee each claim, lists the records HMRC expects, and covers electric cars.

Last checked 9 November 2026 against GOV.UK: the rates and allowances page for travel, HMRC's guidance on simplified expenses, employees' job expenses and business travel mileage, and the advisory fuel rates from 1 September 2026. This is general information, not tax advice.

The approved mileage rates for 2026/27

These are HMRC's approved mileage allowance payment (AMAP) rates, which apply from 6 April 2026 to 5 April 2027.

The 10,000-mile threshold applies per tax year across all the cars and vans you use, not per vehicle. GOV.UK's example: an employee who drives 12,000 business miles in a car has an approved amount of £6,000 for the year, which is 10,000 miles at 55p plus 2,000 miles at 25p. The 5p passenger rate applies only when you carry a fellow employee on a journey that is also a work journey for them; if your employer pays less than 5p, or nothing, there is no relief for the difference.

Electric bikes follow the bicycle rate if they are electrically assisted pedal cycles and the motorcycle rate otherwise. The rates apply across the UK, including Scotland.

What counts as business mileage

Business mileage is travel you have to make for the work itself: to a customer's site, between two workplaces, to a supplier or a trade counter. Ordinary commuting between home and your normal workplace does not count. For an employee, GOV.UK says travel to and from work counts only when it is to a temporary place of work. For a sole trader the same idea applies: journeys from home to a regular base of your business are private, and journeys from that base to jobs are business.

The mileage rate covers the cost of owning and running the vehicle: fuel or electricity, insurance, tax, MOT, servicing and repairs, and depreciation. You cannot claim those separately on top. You can claim parking, tolls and congestion charges for business journeys in addition, and public transport fares for other journeys.

Claiming as a sole trader

If you are self-employed, the mileage rate is one of HMRC's simplified expenses. You multiply your business miles by the flat rate and put the total in the expenses on your Self Assessment return, instead of working out the business share of your actual vehicle costs. GOV.UK's example: 11,000 business miles in the year gives 10,000 miles at 55p, £5,500, plus 1,000 miles at 25p, £250, a claim of £5,750.

The rules that come with it:

• Simplified expenses are for sole traders and partnerships with no company partners. Limited companies cannot use them: a company reimburses its director or employee at the AMAP rates instead (see below).
• You can use the flat rate for cars, vans and motorcycles, but not for a car built for commercial use such as a black cab or a dual-control driving instructor's car.
• You cannot use the flat rate for a vehicle on which you have already claimed capital allowances, or whose costs you have already put through as an expense.
• Once you use the flat rate for a vehicle, you must keep using it for that vehicle for as long as it is in the business. You can use actual costs for one vehicle and the flat rate for another.
• From the 2024/25 tax year, cash basis accounting is the default for sole traders. Mileage works the same way under either method.

Whether the flat rate beats actual costs depends on the car. A cheap, economical car doing high mileage usually comes out ahead on the flat rate; an expensive car doing few miles may do better on actual costs with capital allowances. GOV.UK has a simplified expenses checker that compares the two, and the choice is per vehicle, so run it before you file the first return for a new car.

If you invoice customers for travel, the mileage rate is also a reasonable basis for the charge, and it is a separate matter from the tax claim: a line for "Travel: 120 miles at 55p" on an invoice made with the UK invoice generator is income, and the 55p per mile in your return is an expense. If you are VAT registered, the travel line carries VAT like the rest of your work.

Claiming as an employee

For employees the same rates work in two directions.

What your employer can pay tax-free. An employer can pay mileage allowance payments up to the approved amount (business miles times the rate) without reporting them or deducting tax. Anything above the approved amount is taxable: the employer either reports it on form P11D or puts it through payroll. For National Insurance the employer uses 55p for every business mile in a car or van, with no drop to 25p after 10,000 miles, and anything above that is subject to Class 1 National Insurance through payroll.

What you can claim if your employer pays less. If your employer pays nothing, or less than the approved amount, you can claim tax relief on the shortfall. This is called mileage allowance relief. You work out the approved amount for the year, take away whatever your employer paid you towards it, and claim the difference. Relief is given at your rate of tax, so a basic-rate taxpayer who is owed £1,000 of relief gets £200 back, usually through a change to their tax code or a refund. You can claim for the current tax year and the four previous tax years. There is no relief for National Insurance, and none for passenger payments.

You claim online through HMRC's service, or on your tax return if you complete one. HMRC asks for your mileage log with the claim: the reason for every journey and the postcode of its start and end point, with a separate log for each employment. If you use a company car rather than your own, you claim the actual cost of fuel or electricity for business trips instead, less anything your employer reimbursed.

Records to keep

HMRC accepts the flat rate because you keep a record of the miles. For each business journey record:

• the date;
• where you started and where you went, with postcodes;
• the reason for the journey, such as the customer or site;
• the miles driven, and which vehicle if you use more than one.

A notebook, a spreadsheet or a mileage app all work; what matters is that the log is kept at the time, not reconstructed at the year end. Keep receipts for parking and tolls you claim on top. A sole trader must keep the records that support a tax return for at least 5 years after the 31 January filing deadline for that year, and an employee's claim can be checked for the four years it can cover, so keep the logs for that long.

Electric cars: your own car against a company car

The approved mileage rates do not depend on fuel. If you use your own electric car for business, you claim 55p a mile for the first 10,000 miles and 25p after that, the same as a petrol or diesel car, and the rate is meant to cover electricity, depreciation and everything else. The same applies to a hybrid.

The advisory electric rate (AER) is different and often confused with it. It is for company cars only. When an employee drives an electric company car on business and pays for the charging, the employer can reimburse up to the AER without any tax or National Insurance arising. From 1 September 2026 HMRC publishes two advisory electric rates: 7p a mile for home charging and 15p a mile for public charging. Where a car is charged in both places, the employer can apportion the business miles between the two rates on a fair and reasonable basis. HMRC reviews these rates every quarter, on 1 March, 1 June, 1 September and 1 December, alongside the advisory fuel rates for petrol, diesel and LPG company cars. You must not use the advisory rates for your own car.

If you are weighing up an electric company car through a salary sacrifice scheme, the EV salary sacrifice calculator shows the benefit-in-kind tax and the net monthly cost.

Sources

• Travel: mileage and fuel rates and allowances, GOV.UK (updated 21 May 2026): approved mileage rates from 2026/27 and from 2011 to 2026, and passenger payments.
• Simplified expenses if you're self-employed: vehicles, GOV.UK: who can use flat rates, the 2026/27 rates and the 11,000-mile example.
• Claim tax relief for your job expenses: vehicles you use for work, GOV.UK: what the rate covers, the four-year limit and the mileage log HMRC asks for.
• Expenses and benefits: business travel mileage for employees' own vehicles, GOV.UK: the tax and National Insurance rules for employers, the 12,000-mile example, mileage allowance relief and passenger payments.
• Advisory fuel rates, GOV.UK (updated 21 August 2026): company cars only, the quarterly review dates and the advisory electric rates from 1 September 2026.
• Business records if you're self-employed, GOV.UK: what to keep and for how long.