How the mileage allowance calculator works
When you use your own vehicle for work, HMRC sets an approved mileage rate that your employer can pay you without any tax or National Insurance. These are called Approved Mileage Allowance Payments (AMAPs). For the 2026/27 tax year, which started on 6 April 2026, the car and van rate for the first 10,000 business miles went up from 45p to 55p a mile. HMRC announced the rise in June 2026 and backdated it to 6 April.
| Vehicle | First 10,000 business miles | Over 10,000 miles |
|---|---|---|
| Cars and vans | 55p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
| Passenger payments (cars and vans) | 5p per passenger per business mile | |
If your employer pays less than the approved amount, or nothing at all, you can claim Mileage Allowance Relief on the difference. The relief reduces your taxable income, so you get back the difference multiplied by your highest rate of income tax.
Relief = approved amount − what your employer paid
Tax back = relief × your tax rate (20%, 40% or 45%)
Worked example: 12,000 miles at 45p
You drove 12,000 business miles in your own car and your employer still pays the old 45p a mile.
- Approved amount: 10,000 × 55p = £5,500, plus 2,000 × 25p = £500, so £6,000
- Your employer paid 12,000 × 45p = £5,400
- Mileage Allowance Relief: £6,000 − £5,400 = £600
- Tax back as a basic rate taxpayer: £600 × 20% = £120. At 40% it's £240, and at 45% it's £270.
If your employer pays nothing, the whole £6,000 is relief, worth £1,200 to a basic rate taxpayer.
| Business miles | Approved amount | Employer pays 45p | Relief | Tax back at 20% |
|---|---|---|---|---|
| 2,000 | £1,100 | £900 | £200 | £40 |
| 5,000 | £2,750 | £2,250 | £500 | £100 |
| 10,000 | £5,500 | £4,500 | £1,000 | £200 |
What counts as business mileage?
Business miles are journeys you make for work, such as visiting clients, travelling between sites or going to a temporary workplace. Your normal commute from home to your permanent workplace doesn't count. Keep a log of every journey with the date, the reason, and the start and end postcodes, because HMRC asks for copies of your logs when you claim.
The 10,000-mile limit covers all the cars and vans you use for the same employer in the tax year, not each vehicle. The approved rates are meant to cover all running costs, including fuel, insurance, servicing, vehicle tax and depreciation, so you can't claim for those separately on top.
What if my employer pays more than the approved rate?
Anything above the approved amount is taxable. Your employer should either put it through payroll or report it on your P11D. For National Insurance, cars and vans are treated differently: the 55p rate applies to every business mile, so payments up to 55p a mile are free of NI even beyond 10,000 miles.
Passenger payments
If you give a colleague a lift on a journey that is also a business trip for them, your employer can pay you up to 5p a mile for each passenger tax-free. Unlike the main rate, there's no relief to claim if your employer doesn't pay it.
Tips
- Check your payslip or expenses system. If your employer still pays 45p a mile, you can claim relief on the extra 10p for your first 10,000 miles.
- You can claim relief for the current tax year and the 4 previous years, using the rate in force for each year (45p before 6 April 2026).
- Self-employed? The same 55p and 25p rates apply as simplified expenses for cars and goods vehicles. See how it affects your bill with the self-employed tax calculator.
- Compare what a trip actually costs in fuel with the fuel cost calculator, or if your employer offers a company car instead, check the tax with the company car tax calculator.
Frequently asked questions
What is the HMRC mileage rate for 2026/27?
For cars and vans it's 55p a mile for the first 10,000 business miles in the tax year and 25p a mile after that. Motorcycles are 24p and bicycles 20p a mile, with 5p a mile extra for each work passenger.
Has the 45p mileage rate gone up?
Yes. HMRC raised the car and van rate for the first 10,000 business miles from 45p to 55p a mile, backdated to 6 April 2026. The 25p rate above 10,000 miles didn't change.
How much tax relief do I get on mileage?
You get relief on the gap between the approved amount and what your employer pays, at your highest tax rate. If you do 5,000 miles and get 45p a mile, the gap is £500 and a basic rate taxpayer gets £100 back.
Can I claim mileage for driving to work?
No. Your normal commute to a permanent workplace isn't business travel. Journeys to clients, between sites or to a temporary workplace usually count.
How do I claim Mileage Allowance Relief?
Claim online with HMRC and send copies of your mileage logs, or claim through your tax return if you complete Self Assessment. You can claim for the current tax year and the previous 4.
Last reviewed October 2026 using 2026/27 figures. This calculator gives an estimate for guidance only.