HMRC mileage rates set how much an employer can pay an employee for qualifying work journeys in their own vehicle without an Income Tax charge under the mileage rules. National Insurance uses a separate calculation. Eligible self-employed people can use the corresponding car, van and motorcycle rates to calculate a business expense through HMRC’s simplified expenses method. This guide explains the 2026/27 rates, the changes due from 6th April 2027 and what they mean in practice.
HMRC mileage rates: change at a glance
From 6th April 2027, the 55p rate for the first 10,000 miles becomes permanent and the rate above 10,000 miles rises from 25p to 35p.
The 55p rate replaced the previous 45p rate from 6th April 2026. It applies throughout 2026/27 on a temporary basis. From 6th April 2027, it becomes permanent and the higher-mileage rate increases to 35p.
2026/27 TAX YEAR
Cars and vans: 55p per mile for the first 10,000 business miles, then 25p per mile.
FROM 6TH APRIL 2027
Cars and vans: 55p per mile for the first 10,000 business miles, then 35p per mile. The 55p first-band rate becomes permanent.
OTHER EMPLOYEE VEHICLE RATES
Motorcycles: 24p per mile. Employees using their own bicycles: 20p per mile. A separate 5p passenger payment may apply for each qualifying fellow employee carried in a car or van.
IMPORTANT
The 35p rate does not start until 6th April 2027. It does not apply to mileage travelled in the 2026/27 tax year.
UK-wide · Information checked 1st November 2026
What are the HMRC mileage rates?
For employees, HMRC’s Approved Mileage Allowance Payments (AMAP) rates set the amount an employer can normally pay for qualifying business journeys in an employee’s own vehicle without Income Tax being due, subject to the rules. If an employer pays less, the employee may be able to claim tax relief on the shortfall. If an employer pays more, the excess may be taxable.
Eligible self-employed people use the corresponding simplified mileage rates differently: they deduct the amount from their business profits as a vehicle expense. It is not money paid to them by HMRC. The rates are not compulsory reimbursement rates, and employers can choose what they pay.
HMRC mileage rates for 2026/27
The 2026/27 tax year runs from 6th April 2026 to 5th April 2027. The rates for this tax year are:
The 55p rate for the first 10,000 car and van business miles was announced in May 2026 and applies retrospectively from 6th April 2026. It replaced the previous 45p rate. The rate above 10,000 miles remained 25p throughout 2026/27.
What is changing from 6th April 2027?
The Government announced further changes in its Budget on 28th October 2026. From 6th April 2027, the 55p rate for the first 10,000 car and van business miles will become permanent, and the rate above 10,000 miles will rise from 25p to 35p. These changes apply to employees’ Approved Mileage Allowance Payments and to the corresponding simplified mileage rates used by eligible self-employed people.
The 35p rate is a future change. It must not be used to calculate mileage claims or tax relief for journeys in 2026/27.
Why are HMRC mileage rates increasing?
The Government said the changes are intended to support people who drive for work. It expects around 3 million people to benefit from the Budget changes. The increase to the rate above 10,000 miles is particularly relevant to people who cover high business mileages.
The Government’s Budget statement gave illustrative tax-saving examples. It said someone driving 6,000 business miles could receive up to £120 a year in additional tax savings, while someone driving 15,000 business miles could receive up to £300. These are estimates of potential tax savings, not guaranteed reimbursements or automatic cash payments.
How much more could the new rates mean?
The examples below show the approved mileage amount using the car and van rates. They are not a promise that an employer will pay the full amount. Nor are they the same as the amount of tax relief someone will receive.
Example: 6,000 business miles
2026/27: 6,000 × 55p = £3,300 approved amount.
The new 35p rate above 10,000 miles makes no difference to someone who drives fewer than 10,000 qualifying business miles in the year.
Example: 15,000 business miles
2026/27:
First 10,000 miles: 10,000 × 55p = £5,500
Remaining 5,000 miles: 5,000 × 25p = £1,250
Total approved amount: £6,750
From 6th April 2027:
First 10,000 miles: 10,000 × 55p = £5,500
Remaining 5,000 miles: 5,000 × 35p = £1,750
Total approved amount: £7,250
Difference in the mileage calculation: £500. For an employee, this changes the approved amount used to assess reimbursement and possible tax relief. For an eligible self-employed person using simplified expenses, it changes the vehicle expense they can deduct from business profits. It is not automatically £500 extra take-home pay or a £500 tax refund.
The Government’s estimate of up to £300 in additional annual tax savings for someone driving 15,000 business miles is a separate estimate of the tax benefit. It is not the same as the £500 difference between the two approved mileage calculations.
How do the rates work for employees?
If you use your own car or van for qualifying business journeys, your employer can reimburse you using the approved mileage rates. The approved amount is calculated by multiplying qualifying business miles by the relevant rate for the tax year.
Your employer does not have to pay 55p or 35p per mile. The rates establish the amount that can normally be paid without creating a tax or National Insurance liability, subject to the detailed rules. Your employer may pay a lower rate, a higher rate or nothing, depending on its expenses policy.
If your employer pays less than the approved amount, you may be able to claim Mileage Allowance Relief on the difference. This is tax relief on the qualifying shortfall, not a cash refund of the full mileage amount. Eligibility and claim rules apply.
If your employer pays more than the approved amount, the excess may be treated as taxable earnings. Income Tax and National Insurance use different calculations. For 2026/27, the Income Tax approved rate for cars and vans is 55p for the first 10,000 business miles and 25p after that. For National Insurance, the qualifying amount is 55p for every business mile. This means a payment above 25p for miles over 10,000 may be taxable for Income Tax but does not automatically mean National Insurance is due. From 6th April 2027, the Government says the increase to 35p for mileage above 10,000 will also apply to the corresponding National Insurance disregard. HMRC is expected to publish the detailed 2027/28 rules before they take effect.
What do the changes mean for self-employed people?
Eligible self-employed people can use HMRC’s simplified expenses method to calculate allowable vehicle expenses. Under this method, the mileage rate is deducted from business profits. It is not a payment from HMRC.
The 2026/27 rates are 55p per mile for the first 10,000 qualifying business miles in a car or goods vehicle and 25p for each mile above that. From 6th April 2027, the rate above 10,000 miles is due to rise to 35p. The simplified rate for motorcycles remains 24p per mile. The 20p bicycle rate applies to employees using their own cycles; it is not a self-employed simplified vehicle rate.
Simplified mileage expenses are an alternative to claiming actual vehicle running costs for the same vehicle. You cannot simply claim mileage rates as well as actual costs such as fuel, repairs, insurance and servicing. There are also restrictions on using simplified expenses if you have claimed capital allowances or included the vehicle’s purchase cost as a business expense. Once you use the simplified mileage method for a vehicle, you generally have to continue using it for that vehicle while it is used for business. Check HMRC’s detailed rules before choosing or changing methods.
Do employers have to pay the HMRC mileage rate?
No. HMRC’s approved mileage rates are not a legal minimum reimbursement rate. Employers can set their own expenses policies and decide how much to reimburse employees for business travel in their own vehicles.
However, the amount paid affects the tax treatment. If the employer pays less than the approved amount, the employee may be able to claim Mileage Allowance Relief on the qualifying difference. If the employer pays more, the excess may be taxable and may also affect National Insurance. Employers should keep accurate mileage records and follow the relevant HMRC rules.
Which journeys qualify as business mileage?
Qualifying business mileage can include travel between workplaces, journeys to temporary workplaces and other journeys made as part of carrying out your work. The rules depend on the employment or business circumstances.
Ordinary commuting between home and a permanent workplace does not normally qualify. Travelling from home to a temporary workplace can qualify in some circumstances, but not every workplace described as temporary meets HMRC’s conditions. A workplace is generally treated as permanent if you expect to work there for more than 24 months and spend 40% or more of your working time there. The 24-month rule can also apply if your expectation changes while you are working at that location. Check HMRC’s guidance if you work at different locations or have a changing work pattern.
How do you claim mileage tax relief?
Employees who receive less than the approved amount may be able to claim Mileage Allowance Relief from HMRC. You will need records of your qualifying business mileage and the amounts your employer reimbursed. The way you claim depends on the amount and your circumstances. Check HMRC’s current guidance before submitting a claim.
Self-employed people who use simplified mileage expenses include the relevant allowable amount in their business expense calculation when completing Self Assessment. Keep a record of business journeys, mileage and the method used.
The calculator below is for employees who use their own car, van, motorcycle or bicycle for qualifying work journeys. Choose the tax year, enter your business miles and compare your employer’s average payment with the relevant approved amount. It can also give a simple illustration of possible Mileage Allowance Relief if your employer pays less than the approved amount. It includes the announced 2027/28 car and van rate, but it does not calculate National Insurance, self-employed business expenses or a guaranteed tax refund.
Employee mileage allowance calculator
Estimate the HMRC-approved mileage amount for your own vehicle and qualifying work journeys. This calculator is for employees. It compares your employer's mileage payments with the approved amount and gives an illustration of possible Mileage Allowance Relief.
Count qualifying work journeys only. Normal travel between home and your permanent workplace does not count.
Cars and vans: 55p per mile for the first 10,000 miles and 25p thereafter.
Enter the average amount paid for each business mile in pounds. For example, enter 0.45 for 45p. Enter 0 if your employer pays nothing. If your employer pays different rates above and below 10,000 miles, calculate a weighted average for all your miles.
Count each fellow employee's journey separately. For example, carrying two colleagues for 10 miles equals 20 passenger miles. The extra 5p per passenger mile applies to cars and vans only, where the journey also qualifies as a work journey for each passenger.
Choose the marginal rate that applies to the income on which relief would be due. Scottish Income Tax bands differ from those in the rest of the UK. If you are unsure, check your tax band before relying on this estimate.
Enter your business miles and your employer's average payment per mile to see an estimate.
Estimate only. It assumes all entered miles qualify and uses one average employer payment. Mileage Allowance Relief is tax relief on an eligible shortfall, not a refund of the full mileage amount. The calculator does not calculate National Insurance, self-employed expenses or your final tax bill. For 2026/27, the National Insurance qualifying amount for cars and vans is 55p for every business mile, which differs from the Income Tax calculation above 10,000 miles. Check HMRC guidance before making a claim.
What should you check now?
YOUR QUICK CHECKLIST
- Use the 2026/27 rates for business journeys up to and including 5th April 2027.
- Do not apply the 35p rate above 10,000 miles until 6th April 2027.
- If employed, check your employer’s mileage policy and whether you can claim tax relief on any qualifying shortfall.
- If self-employed, confirm whether you use simplified mileage expenses or actual vehicle costs for the vehicle.
Frequently asked questions
What are the HMRC mileage rates for 2026/27?
For cars and vans, the rate is 55p per mile for the first 10,000 qualifying business miles and 25p per mile above that. Motorcycles are 24p per mile and bicycles are 20p per mile.
Are HMRC mileage rates increasing in April 2027?
Yes. From 6th April 2027, the car and van rate above 10,000 business miles is due to increase from 25p to 35p per mile. The 55p rate for the first 10,000 miles will become permanent.
When does the 35p mileage rate start?
It starts on 6th April 2027. It does not apply to journeys in the 2026/27 tax year.
Is the 55p rate permanent?
The Government announced in the October 2026 Budget that the 55p rate for the first 10,000 car and van business miles will be made permanent.
Can I claim 35p per mile for all my business mileage?
No. The 35p rate applies only to qualifying car and van business miles above 10,000 in a tax year, from 6th April 2027. The first 10,000 miles remain at 55p.
Do employers have to pay 55p per mile?
No. Employers can set their own reimbursement rates. The HMRC rate sets the approved tax-free amount and can affect whether an employee may claim Mileage Allowance Relief.
Can self-employed people use the new mileage rates?
Eligible self-employed people can use HMRC’s simplified expenses method. The 2026/27 car and goods-vehicle rates are 55p for the first 10,000 miles and 25p thereafter. The 35p rate above 10,000 miles is due to apply from 6th April 2027.
Can I claim tax relief if my employer pays less than HMRC’s rate?
You may be able to claim Mileage Allowance Relief on the difference between the approved amount and what your employer paid, provided the journeys and your circumstances qualify. Relief is a tax deduction, not a reimbursement of the full shortfall.
Are motorcycle and bicycle mileage rates changing?
The October 2026 Budget announcement did not change the employee rates for motorcycles or bicycles. They remain 24p and 20p per mile respectively. For self-employed people using simplified vehicle expenses, the motorcycle rate is 24p; bicycles are not included in that simplified vehicle rate.
Can I claim mileage for travelling between home and work?
Ordinary commuting between home and a permanent workplace does not normally qualify. Some journeys to temporary workplaces or between work locations may qualify, depending on HMRC’s rules.
Is the 5p passenger allowance changing?
The additional 5p per mile passenger payment was not changed by the Budget announcement. It applies per fellow employee carried in a car or van, where the journey is also a qualifying business journey for that passenger. For example, carrying two colleagues for a 10-mile qualifying journey gives 20 passenger miles, which may qualify for an additional £1 (20 × 5p).
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