Last reviewed: May 2026
TL;DR- HMRC has raised the approved mileage allowance payment rate to 55p per mile for the first 10,000 business miles.
- The previous rate of 45p per mile had been unchanged since 2011.
- Employees using personal vehicles for work can claim the difference if paid less by their employer.
- Self-employed workers can use the rate to calculate allowable expenses on their tax return.
- The rate for miles above 10,000 in a tax year remains at 25p per mile.
HMRC has increased the approved mileage allowance payment rate to 55p per mile for the first 10,000 business miles driven in a tax year, rising from 45p per mile. The change ends a 15-year freeze on the rate, which had remained unchanged since 2011 despite significant increases in fuel costs, insurance premiums and vehicle running costs over that period.
What the New 55p Rate Means
The approved mileage allowance payment, commonly referred to as the AMAP rate, is the amount employers can pay employees for using their own vehicle for business travel without triggering a tax or National Insurance liability. Where employers pay less than the AMAP rate, employees can claim tax relief on the shortfall through their self-assessment tax return or by contacting HMRC directly.
At the new 55p rate, an employee driving 10,000 business miles in a tax year who is paid at the full approved rate receives £5,500 tax-free from their employer. At the old 45p rate the equivalent figure was £4,500. For higher-rate taxpayers claiming relief on an employer shortfall, the increase in the rate also increases the value of any claim.
The rate for miles above 10,000 in a single tax year remains at 25p per mile. Motorcycle users receive 24p per mile regardless of mileage, and cyclists 20p per mile. These secondary rates are unchanged.
Who Is Affected
The change affects three main groups. Employees who use their own car for business travel and are reimbursed by their employer at or below the AMAP rate now benefit from the higher ceiling. Employers who wish to pay the full approved rate without generating a taxable benefit will need to update their mileage reimbursement policies to reflect 55p per mile.
Self-employed sole traders and partnerships using the simplified expenses method to claim vehicle costs on their tax return also use the AMAP rate as the basis for their mileage claim. For self-employed individuals driving significant business mileage, the increase from 45p to 55p per mile adds £1,000 to the allowable expense figure for each 10,000 business miles driven.
Limited company directors who use their own vehicle for company business can claim mileage at the approved rate from their company. The company deducts the mileage payment as a business expense, and no benefit in kind arises for the director provided payments do not exceed the AMAP rate.
How to Claim the Mileage Relief
Employees paid below the approved rate by their employer can claim mileage tax relief through HMRC's online services at gov.uk. Claims can be made for the current tax year and up to four previous tax years. HMRC requires a record of each business journey, including the date, destination, purpose and number of miles driven. A simple spreadsheet or mileage log application is sufficient. Receipts for fuel are not required when claiming at the approved mileage rate.
Self-employed individuals record the mileage claim in the vehicle expenses section of their self-assessment tax return. The simplified mileage rate cannot be used in the same tax year as the actual cost method for the same vehicle.
Context: Why the Rate Was Frozen for 15 Years
The AMAP rate was last adjusted in April 2011, when it rose from 40p to 45p per mile. Since then, the AA and RAC have both published data showing average running costs for a medium-sized petrol car have increased substantially, driven by fuel prices, insurance costs and vehicle depreciation. Motoring organisations and employer groups had lobbied for a rate increase for several years before the 2026 adjustment was announced.
Frequently Asked Questions
Can I backdate a claim for mileage at the new 55p rate?
No. The new rate applies from the date HMRC confirmed the change. Claims for previous tax years must use the rate in force during that year. For the years when the 45p rate applied, any claim must be calculated at 45p per mile.
What records do I need to keep to claim mileage allowance?
HMRC requires a mileage log recording each business journey, including date, start and end point, purpose and distance. The log does not need to be in a specific format, but it must be available on request. HMRC may challenge claims where records are incomplete or the business purpose of journeys is unclear.
Does the 55p rate apply to electric vehicles?
Yes. The AMAP rate applies to all personally owned vehicles used for business travel, including electric vehicles. There is a separate advisory electricity rate for company cars, which is different from the AMAP rate and applies only where an employer reimburses the cost of electricity for a company-owned vehicle.
How We Verified This
This article draws on HMRC's approved mileage allowance payments guidance on gov.uk, HMRC's published rates for the 2026-27 tax year, and the Office of Tax Simplification's prior recommendations on mileage rates. Figures verified in May 2026.
