AMAP mileage rate rises from 45p to 55p per mile, backdated to 6 April 2026

HMRC has confirmed an increase to the Approved Mileage Allowance Payments (AMAP) rate for cars and vans, from 45p to 55p per mile for the first 10,000 business miles in a tax year. The increase is retrospective, taking effect from 6 April 2026, and will be legislated through the Taxation (Energy and Vehicles) Bill. The rate for business miles above the 10,000-mile threshold is unchanged at 25p per mile.

What is changing

AMAP rates set the tax-free amount an employer can pay an employee for using their own car or van on business journeys, and the same figures double up as HMRC's simplified mileage expenses method for the self-employed. From 6 April 2026:

• First 10,000 business miles: 55p per mile (up from 45p)
• Miles above 10,000 in the same tax year: 25p per mile (unchanged)

HMRC's policy paper confirms the new rates "will also apply to businesses that use simplified mileage rates," so sole traders and partners using simplified expenses get the same 55p/25p schedule as employees. Rates for motorcycles and bicycles are not covered by this specific change.

When it takes effect

The increase applies retrospectively from 6 April 2026, meaning it covers the whole of the 2026/27 tax year even though the policy paper was only published on 17 June 2026. Employers, employees and the self-employed can apply the new 55p rate to business mileage incurred from the start of the tax year, not just from the announcement date.

Who it affects

Two groups are affected in different ways:

• Employees claiming Mileage Allowance Relief (MAR). If your employer reimburses you at less than the approved rate, you can claim the shortfall as tax relief via a P87 form or through the employment pages of a Self Assessment return. The shortfall is now measured against 55p (not 45p) for the first 10,000 miles, so anyone under-reimbursed sees a bigger relief claim for 2026/27.
• Self-employed people using simplified mileage expenses. Sole traders and partners who choose the simplified expenses method for vehicles (rather than claiming actual running costs and capital allowances) can now deduct mileage at 55p per mile for the first 10,000 business miles of the 2026/27 tax year.

Worked example

A self-employed tradesperson who drives 9,000 business miles in 2026/27 can claim:

• At the new 55p rate: 9,000 x 55p = £4,950
• At the old 45p rate: 9,000 x 45p = £4,050

That is an extra £900 of deductible expense for the same mileage, reducing taxable profit by that amount. An employee reimbursed at, say, 30p per mile by their employer for the same 9,000 miles would see their Mileage Allowance Relief shortfall rise from (45p - 30p) x 9,000 = £1,350 to (55p - 30p) x 9,000 = £2,250.

What to do now

• Employees: check what your employer actually pays per mile. If it is below 55p for the first 10,000 miles (or below 25p above that), you can claim Mileage Allowance Relief for the difference via P87 or Self Assessment, backdated to 6 April 2026.
• Self-employed: if you use simplified mileage expenses, apply 55p per mile for the first 10,000 business miles when you prepare your 2026/27 accounts, even though the rate change was announced partway through the year.
• Employers: review whether your mileage reimbursement policy should move to 55p to keep payments tax-free and avoid triggering P11D reporting obligations at the old, now-outdated, rate.
• Keep a mileage log: HMRC expects a contemporaneous record of date, start and end points, business purpose and miles for every claimed journey, regardless of which rate applies.

See our mileage allowance guide for the full AMAP schedule including motorcycle and bicycle rates, or use the mileage tax relief calculator to work out your own Mileage Allowance Relief claim.