What are the HMRC mileage rates?

HMRC Approved Mileage Allowance Payments (AMR), unchanged since April 2011: 45p per mile for the first 10,000 business miles in a tax year (car or van), 25p per mile above 10,000; 24p per mile for motorcycles; 20p per mile for bicycles. These are the ceiling for what employers can reimburse tax-free - payments above count as taxable earnings.

What counts as a business mile?

Travel from your normal workplace to a temporary workplace, or between two workplaces in the course of your job. The commute between home and your permanent workplace is NOT business travel and CANNOT be claimed. If you're a home-based worker your home can be your permanent workplace - then travel to any client site is business mileage.

What if my employer pays less than 45p/25p?

You can claim Income Tax relief (not a cash reimbursement) on the shortfall. Multiply the shortfall by your marginal Income Tax rate (20%, 40%, or 45%). Example: 12,000 miles at 25p from employer = £3,000; AMR entitlement = £5,000; shortfall £2,000; relief at 20% = £400 / at 40% = £800.

How do I claim the tax relief?

If total claim is under £2,500 per year: fill in form P87 online via your Personal Tax Account, or write to HMRC. If over £2,500: use Self Assessment. Keep mileage records - HMRC can ask for proof up to 4 years after the end of the tax year. Fuel receipts are helpful but a mileage log is the primary evidence.

What if my employer pays more than 45p?

The excess is taxable as earnings. Example: employer pays 60p/mile for 8,000 miles = £4,800; AMR = £3,600; excess £1,200 is added to your taxable income. Most employers cap payments at AMR to avoid this. If yours pays more it should appear on your P11D.

Can I claim mileage if I use a company car?

Different rules. Company-car drivers use HMRC Advisory Fuel Rates (AFR), pence-per-mile figures set quarterly by HMRC that cover only the fuel cost (not wear and tear, since the employer owns the car). AFR is much lower than AMR - typically 8-22p depending on engine size and fuel. This calculator is for personal-vehicle-for-business-use.

Can I claim for carrying passengers on business trips?

Yes - there's a separate Passenger Payment scheme: employers can pay an extra 5p per mile tax-free for each fellow employee you carry on a business journey. The passenger must also be on business travel. You cannot claim tax relief on the passenger payment if your employer does not pay it - AMR only covers the driver portion.

Does this apply to self-employed people?

Yes - sole traders can use the same AMR rates as a simplified expense deduction (45p/25p/24p/20p). Alternative: track actual motoring costs (fuel, servicing, insurance, depreciation) and claim the business-use proportion. You must pick one method per vehicle per year - you can't mix.

UK Mileage Tax Relief 2026/27

HMRC Approved Mileage Allowance Payments: 45p per mile for the first 10,000 business miles, 25p above; 24p motorcycles, 20p bicycles. Unchanged since April 2011. If your employer pays less, claim Income Tax relief on the shortfall.

Your business travel

Tax relief you can claim

£400

On a £2,000 shortfall — claim through HMRC.

HMRC entitlement: £5,000
Employer paid: £3,000
Shortfall (or excess): £2,000
Relief (or extra tax): £400

Claim via P87 online (Personal Tax Account) if total expenses claim < £2,500; Self Assessment otherwise.

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How the calculation works

HMRC entitlement = first 10,000 miles × 45p + remaining × 25p (car/van). Motorcycles: miles × 24p flat. Bicycles: miles × 20p flat.
Employer paid = miles × pence-per-mile your employer reimburses.
Shortfall = entitlement − employer paid. If positive, you can claim Income Tax relief on it at your marginal rate. If negative, the excess is taxable earnings on your P11D.
Relief = shortfall × your marginal Income Tax rate (20% / 40% / 45%).

Self-Employed Tax →

Sole traders claim simplified expenses at the same 45p / 25p. See full self-employed Income Tax + NI.

Company Car BIK →

Using a company car instead? HMRC AFR (lower pence rates) applies, not AMR. Compare the two.

Salary Take-Home →

Tax relief on mileage lands in your next tax-code adjustment. See the take-home uplift.

Tax Code Explainer →

Claiming relief bumps your tax-code number. See how the new code reads.

Sources

HMRC — Business travel mileage: rules for tax (rates in force since April 2011, retrieved 20 April 2026)
HMRC — Claim tax relief on business mileage (P87 process)
HMRC — Travel mileage and fuel rates and allowances (current)

FAQ

What are the HMRC mileage rates?: HMRC Approved Mileage Allowance Payments (AMR), unchanged since April 2011: 45p per mile for the first 10,000 business miles in a tax year (car or van), 25p per mile above 10,000; 24p per mile for motorcycles; 20p per mile for bicycles. These are the ceiling for what employers can reimburse tax-free - payments above count as taxable earnings.
What counts as a business mile?: Travel from your normal workplace to a temporary workplace, or between two workplaces in the course of your job. The commute between home and your permanent workplace is NOT business travel and CANNOT be claimed. If you're a home-based worker your home can be your permanent workplace - then travel to any client site is business mileage.
What if my employer pays less than 45p/25p?: You can claim Income Tax relief (not a cash reimbursement) on the shortfall. Multiply the shortfall by your marginal Income Tax rate (20%, 40%, or 45%). Example: 12,000 miles at 25p from employer = £3,000; AMR entitlement = £5,000; shortfall £2,000; relief at 20% = £400 / at 40% = £800.
How do I claim the tax relief?: If total claim is under £2,500 per year: fill in form P87 online via your Personal Tax Account, or write to HMRC. If over £2,500: use Self Assessment. Keep mileage records - HMRC can ask for proof up to 4 years after the end of the tax year. Fuel receipts are helpful but a mileage log is the primary evidence.
What if my employer pays more than 45p?: The excess is taxable as earnings. Example: employer pays 60p/mile for 8,000 miles = £4,800; AMR = £3,600; excess £1,200 is added to your taxable income. Most employers cap payments at AMR to avoid this. If yours pays more it should appear on your P11D.
Can I claim mileage if I use a company car?: Different rules. Company-car drivers use HMRC Advisory Fuel Rates (AFR), pence-per-mile figures set quarterly by HMRC that cover only the fuel cost (not wear and tear, since the employer owns the car). AFR is much lower than AMR - typically 8-22p depending on engine size and fuel. This calculator is for personal-vehicle-for-business-use.
Can I claim for carrying passengers on business trips?: Yes - there's a separate Passenger Payment scheme: employers can pay an extra 5p per mile tax-free for each fellow employee you carry on a business journey. The passenger must also be on business travel. You cannot claim tax relief on the passenger payment if your employer does not pay it - AMR only covers the driver portion.
Does this apply to self-employed people?: Yes - sole traders can use the same AMR rates as a simplified expense deduction (45p/25p/24p/20p). Alternative: track actual motoring costs (fuel, servicing, insurance, depreciation) and claim the business-use proportion. You must pick one method per vehicle per year - you can't mix.

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Your business travel

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Sources

FAQ

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