UK Mileage Allowance (2026/27): AMAP rates, MAR relief and records

1. Overview: what AMAP covers and what it does not

The Approved Mileage Allowance Payment scheme is HMRC's mechanism for reimbursing the running cost of using a personal vehicle for business journeys without creating taxable income or National Insurance liability. It sits in section 229 ITEPA 2003 for employees and section 94D ITTOIA 2005 for the self-employed simplified-expenses parallel. The rate is the same in both regimes; the route to claim differs.

AMAP applies to journeys in a vehicle owned (or hired) by the employee or sole trader personally. It does not apply to company cars (where the Advisory Fuel Rate and a benefit-in-kind charge apply instead), employer-supplied pool vehicles, or to vehicles leased by the business itself. It applies regardless of fuel type: petrol, diesel, hybrid, plug-in hybrid and pure electric vehicles all attract the same 45p / 25p schedule. Electric vehicle owners often feel the rate is overly generous given low pence-per-mile electricity cost; petrol drivers at 40 mpg on £1.45 per litre fuel feel the opposite. HMRC has rejected multiple recent calls to differentiate or uprate the rates.

AMAP does not cover any of the following: ordinary commuting (home to permanent workplace), private journeys, journeys reimbursed by a different mechanism (per diem subsistence, fuel cards on a company car), or travel paid for via a salary-sacrifice scheme. It also does not cover passenger costs as a passenger - if a colleague drove and you were the passenger, you cannot claim mileage. The 5p passenger payment goes to the driver, not the passenger.

2. Cars and vans: 45p / 25p with a 10,000-mile threshold

For cars and vans the rate is 45p per mile for the first 10,000 business miles in the tax year and 25p per mile thereafter. The threshold resets on 6 April each year. The same rate covers both vehicle classes; HMRC defines "van" by reference to construction (primarily a goods vehicle with a permissible gross weight up to 3,500 kg) rather than to body shape, so most pickup trucks and crew-cabs in commercial use qualify.

The 10,000-mile threshold is significant in practice. Most office employees who occasionally visit clients accumulate well under 10,000 business miles per year and stay entirely in the 45p band. Field-based roles (sales reps, engineers, district nurses, parish priests, mobile hairdressers) routinely cross into the 25p band and the relief value drops sharply. A salesperson on 18,000 business miles per year receives £4,500 + £2,000 = £6,500 of tax-free AMAP versus £8,100 if the 45p rate continued throughout - £1,600 of relief lost to the threshold. The 25p rate is calibrated to running cost only (fuel plus wear and tear), removing the wider depreciation and fixed-cost element built into the first-10,000 figure.

The 10,000-mile threshold is per individual taxpayer, not per employer. If you change jobs mid-year and drive 6,000 business miles for employer A and then 5,000 for employer B, you have 11,000 miles in the tax year as a whole - so the last 1,000 of those should sit in the 25p band. Employer B has no visibility of employer A's mileage and will typically reimburse the full 5,000 at 45p, generating £100 of taxable excess (5p x 1,000) plus the under-claim of relief on the under-10,000 portion. Employees in this position should reconcile via Self Assessment at year end rather than P87, because the offset between employers is complex.

For directors of their own limited companies, the AMAP scheme is one of the most efficient mechanisms for extracting cash from the company tax-free. A director driving 8,000 business miles per year can be reimbursed £3,600 by the company. The company gets corporation tax relief on the £3,600 (saving 25% = £900) and the director receives it with no Income Tax, NIC or dividend tax. Done properly with a mileage log, this is one of the few remaining "free" routes between company and personal pocket post the 2023 dividend allowance cut.

Note that vans owned personally and used "insignificantly" for private journeys (a separate concept from cars) are still on the 45p / 25p rate; the "insignificant private use" exemption is for benefit-in-kind purposes on company-owned vans, not for personal-van AMAP. If the employee owns the van, AMAP applies.

3. Motorcycles, bicycles and the 5p passenger payment

Two-wheeled vehicles and pedal cycles are on flat rates with no threshold. Motorcycles attract 24p per mile for every business mile in the tax year, mopeds included. There is no step-down at 10,000 miles - a courier on 20,000 business miles on a motorcycle receives £4,800 of tax-free AMAP, slightly more than a car driver on the same mileage (£3,500 + £2,500 = £6,000 because the car 45p band makes up for the lower 25p tail).

Bicycles attract 20p per mile, again flat with no threshold. The bicycle rate has stood at 20p since 2002 and covers both pedal cycles and electrically-assisted pedal cycles (EAPCs) that meet the EAPC definition - up to 250W of assistance, cuts out at 15.5 mph, no throttle. Electric bikes that fall outside the EAPC definition (faster, more powerful, or throttle-operated) are classified as motor vehicles and need to be registered, taxed and insured; mileage on these would be on the 24p motorcycle rate. For the everyday e-bike commuter or business traveller the 20p rate applies.

Cycle mileage on the 20p rate is one of the most under-used reliefs in the system. A consultant cycling 6 miles each way to a client site twice a week for 40 weeks of the year racks up 960 business miles, worth £192 of tax-free mileage. It costs nothing in fuel; it is pure margin. The same logic applies to bike couriers, food delivery riders working as self-employed (Deliveroo, Just Eat, Uber Eats) and freelance consultants who cycle to client meetings.

The 5p passenger payment is an employer-discretionary top-up. If you carry one or more employees of the same employer on the same business journey, the employer may pay an extra 5p per mile per passenger, tax-free. Two colleagues to a client meeting = 10p per mile passenger payment on top of the 45p AMAP, so 55p per mile total. The passenger payment is not available for self-employed simplified expenses (it is purely an employer mechanism), and there is no MAR top-up if the employer chooses not to operate it. The passenger must be on the trip for a business purpose; ferrying your spouse to a client dinner does not qualify.

4. Self-employed simplified expenses: choosing 45p/25p versus actual costs

Self-employed sole traders and partners have a choice between two methods of claiming vehicle expenses against trading profit:

• Simplified expenses: 45p/mile for the first 10,000 business miles, 25p above; 24p for motorcycles; 20p for bicycles. No further claims for fuel, insurance, repairs, road tax, MOT or capital allowances on the vehicle. The rate is "all-in".
• Actual cost: claim the business-use proportion of every running cost (fuel, insurance, road tax, MOT, servicing, repairs, parking, breakdown cover, finance interest) plus capital allowances on the vehicle itself (Annual Investment Allowance on commercial vehicles, writing-down allowances on cars with CO2-graduated rates).

The election is per vehicle. You can use simplified for the car and actual cost for the van, or vice versa, but once you choose simplified for a particular vehicle you must keep using it for that vehicle until the vehicle is replaced. HMRC manual BIM75001 sets out the rule. The most common pivot point is buying a new vehicle - it is a free chance to reconsider.

The decision rule: simplified usually wins for cheap cars at modest mileage; actual cost usually wins for expensive cars, vans, high-mileage drivers and EVs. Some illustrative arithmetic:

• £8,000 used Ford Focus, 6,000 business miles, 60% business use: simplified gives 6,000 x 45p = £2,700. Actual cost (60% of £4,200 total running cost = £2,520) plus writing-down allowance on the £8,000 car at 18% per year (£1,440 in year 1, allocated 60% = £864) = £3,384. Actual narrowly wins, but the bookkeeping is much heavier.
• £40,000 new BMW 5-Series, 12,000 business miles, 70% business use: simplified gives 10,000 x 45p + 2,000 x 25p = £4,500 + £500 = £5,000. Actual cost (70% of £8,400 running cost = £5,880) plus 6% WDA on the £40,000 car (over 50g CO2) at £2,400 x 70% = £1,680. Total actual £7,560. Actual wins by £2,560.
• Vauxhall Combo van, £18,000, 18,000 business miles, 100% business use: simplified gives 10,000 x 45p + 8,000 x 25p = £4,500 + £2,000 = £6,500. Actual cost (£6,200 fuel and running) plus Annual Investment Allowance on the full £18,000 van in year 1 = £24,200 in year 1. Actual wins dramatically in year 1, narrows from year 2 onwards.
• £32,000 Tesla Model 3, 9,000 business miles, 80% business use: simplified gives 9,000 x 45p = £4,050. Actual cost (electricity £800 + insurance £700 + servicing £400 = £1,900, then 80% = £1,520) plus 100% First-Year Allowance on a new zero-emission car of £32,000 in year 1. Year 1 actual cost wins by £29,470. Year 2 onwards the FYA is gone and simplified usually wins back.

The capital-allowances tail is critical for any non-trivial-cost vehicle. Cars purchased new with CO2 emissions of 0g/km qualify for the 100% First-Year Allowance, writing off the full purchase price in year 1 (subject to business-use proportion). Cars between 1 and 50g/km CO2 receive the 18% main-rate WDA. Cars over 50g/km receive the 6% special-rate WDA. Commercial vehicles (vans, pickups designed primarily as goods carriers) qualify for the Annual Investment Allowance (£1,000,000 cap) and can be written off in full in year 1. The capital allowances calculator models the AIA, FYA and WDA pools end-to-end.

One important constraint: if you have ever claimed capital allowances on a vehicle (under the actual-cost method) you cannot then switch that vehicle to simplified expenses. The simplified rate is meant to incorporate capital allowances within itself; double- counting via a switch would be abuse. The clean approach is to decide on day one of buying the vehicle, model both routes, and stick with the choice for the life of the vehicle.

Self-employed taxpayers using simplified expenses for the vehicle can still claim parking, congestion charge, ULEZ and toll fees separately - the simplified rate is for the wear-and-tear and fuel element only. Tolls and parking are not in the AMAP either, on either side. Speeding fines and parking fines, however, are explicitly disallowable for both employees and the self-employed (HMRC manual BIM38500).

5. Employer reimbursement mechanics: at, above and below AMAP

When an employer reimburses an employee for business mileage, the reimbursement falls into one of three brackets relative to the AMAP schedule, each with different tax consequences:

• At AMAP (45p / 25p / 24p / 20p): fully tax-free and NIC-free. No payslip entry, no P11D, no Self Assessment line. This is the cleanest position for both sides.
• Below AMAP: the cash paid is tax-free, but the shortfall versus AMAP becomes an allowable deduction the employee can claim via Mileage Allowance Relief (MAR). See section 6 for the mechanics.
• Above AMAP: the cash paid is taxable on the excess. A flat 50p per mile is 5p above AMAP for the first 10,000 miles and 25p above AMAP from mile 10,001 onward. Employers must report the excess via payroll (the modern PBIK route) or P11D.

Most large UK employers operate at exactly 45p / 25p (with the automatic step-down at 10,000 miles) to keep mileage administratively out of the payroll-benefit system entirely. Some operate at 45p flat throughout the year, which creates the excess from mile 10,001 onward - a manageable PBIK exception. Some operate below AMAP (often around 25p flat, occasionally lower, sometimes the HMRC Advisory Fuel Rate for the relevant engine class) and rely on employees to reclaim the shortfall via P87. A handful pay nothing and leave the whole AMAP as the employee's MAR claim.

The 10,000-mile threshold is critical to employer reimbursement design. A flat 45p reimbursement is fine for employees who stay under 10,000 miles in the year, but creates above-AMAP excess from the first mile over the threshold. A blended employer that pays 45p for the first 10,000 and 25p thereafter mirrors AMAP exactly. A blended employer that pays 25p flat is below AMAP by 20p for the first 10,000 miles and at AMAP from 10,001 onward - generating sizeable MAR claims for road-warriors.

For passenger payments: the 5p per passenger rate is permissive, not mandatory. Employers can pay it tax-free if they choose. They cannot pay above 5p without it becoming taxable. Employees cannot claim MAR to top up a missing passenger payment - the 5p exists only on the employer side.

Fuel-card variations matter. If an employer issues a fuel card for business use only and an employee uses their own car, AMAP still applies to the mileage, but the cash equivalent of any private fuel paid for via the fuel card is a benefit in kind (separate from AMAP and outside its scope). Most employers asking employees to use personal cars do not issue fuel cards at all, leaving the 45p AMAP to do all the work.

6. Claiming Mileage Allowance Relief via P87 or Self Assessment

If your employer reimburses below AMAP, the shortfall is an allowable deduction against employment income. The relief is called Mileage Allowance Relief (MAR), set out in section 231 ITEPA 2003. There are two routes to claim, depending on whether you are already in the Self Assessment system.

Route 1: Form P87 (employees not in Self Assessment)

The P87 ("Tax relief for expenses of employment") is HMRC's form for employees who are not otherwise required to file Self Assessment. You can submit it online via your Personal Tax Account, by post on the printed form (HMRC P87 - online version preferred since 2022), or by iForm. The online route is fastest, with HMRC processing most P87 claims within 4 to 6 weeks.

What you need to fill in for a mileage MAR claim:

• Your National Insurance number and employer's PAYE reference (top of your payslip or P60).
• Tax year of the claim (claims can go back up to 4 tax years; for 2026/27, that means you can also claim back to 2022/23 if not already filed).
• Total business miles in the year by vehicle type.
• Total reimbursement received from the employer for those miles.
• Calculation of the shortfall: (AMAP rate x miles) - (employer rate x miles).

HMRC then either adjusts your current-year PAYE tax code (effectively paying the relief through bigger monthly take-home for the rest of the year) or makes a direct refund for a closed prior year. The refund usually arrives by cheque or BACS within 4 weeks of HMRC confirming the claim.

A worked P87 calculation. Maria drives 8,500 business miles in 2026/27 for her employer; the employer reimburses at 25p per mile. AMAP at 45p x 8,500 = £3,825. Reimbursed at 25p x 8,500 = £2,125. Shortfall = £1,700. As a basic-rate taxpayer Maria recovers £1,700 x 20% = £340 of tax. As a higher-rate taxpayer she would recover £1,700 x 40% = £680. P87 generates the refund cleanly.

Route 2: Self Assessment employment pages

If you already file Self Assessment for any other reason (high earner, side hustle, landlord, dividends above the allowance, HICBC), you cannot use P87 - you must claim MAR through the employment pages of the SA100. Box 17 on the SA102 Employment supplementary page is "Business travel and subsistence expenses". The figure to enter is the AMAP-equivalent shortfall: total AMAP amount the law would allow, minus the employer reimbursement actually received. The net shortfall flows through to box 20 (total) and reduces taxable employment income.

The Self Assessment route is computationally identical to P87 but lets you claim other employment expenses (professional subscriptions, working-from-home flat rate, mandatory equipment) in the same return. It is mandatory for any P87 claim above £2,500 in a single year - HMRC routes those to SA regardless. It is also the route HMRC prefers for any employee with multiple employments in the year (where the cross-employer mileage reconciliation needs the full SA framework).

Records to keep

Either route requires a contemporaneous mileage log to back up the claim if HMRC asks. The log should contain, for every business journey: date, postcode or address of start and end, business purpose (with a meaningful description, not just "client"), miles claimed, and (optionally but recommended) odometer reading. Retain the log for at least 5 years after the 31 January Self Assessment filing deadline of the relevant tax year. HMRC manual EIM31330 makes clear that estimates compiled after the fact are not acceptable - the log must be created in real time, journey by journey.

7. Permanent versus temporary workplace: the test that decides everything

All of the AMAP / MAR machinery is moot if the journey is not a business journey. The frontier between deductible business travel and non-deductible "ordinary commuting" is the permanent versus temporary workplace test, codified at section 339 ITEPA 2003 and worked through in detail in HMRC manual EIM32000 to EIM32200. It is the single most-litigated area of employee expenses and the topic HMRC compliance checks most often probe.

A permanent workplace is one you attend regularly to perform the duties of your employment. The drive between home and a permanent workplace is "ordinary commuting" and is not tax-deductible (section 338 ITEPA 2003) - not as mileage, not as train fare, not as anything. Section 338 is absolute: even if your employer reimburses your commute, the reimbursement is taxable.

A temporary workplace is one you attend for a limited duration or temporary purpose. Mileage between home and a temporary workplace is fully deductible at AMAP rates. The site is temporary if either of these is true:

• The 24-month rule (EIM32080): continuous attendance at the site is expected to be, or actually is, less than 24 months. The 24-month clock looks forward from each point: as soon as you know (or should reasonably have known) that attendance will exceed 24 months, the site flips from temporary to permanent from that date. A 30-month contract signed on day 1 means the site is permanent from day 1. A 12-month contract extended at month 18 to 30 months means the site is temporary for months 1 to 18 and permanent from month 19.
• The 40% rule (EIM32125): attendance at the site accounts for less than 40% of total working time. A consultant who spends 1 day a week at a client site (20%) is well below 40% and the site is temporary on that basis alone, regardless of how long the relationship lasts. The 40% test is by reference to total working time including time at home, the office and other sites.

If either test is satisfied the site is temporary. If both fail it is permanent. The interaction matters: a long-standing client relationship where a consultant attends 1 day a week for 5 years is still a temporary workplace because the 40% test never engages, even though the 24-month rule has long since failed. Conversely, a 6-month placement at a single client where the consultant is on-site 5 days a week is temporary by both tests.

Three further wrinkles to be aware of:

• The "depot" exception (EIM32160): a workplace you must attend to start work or collect tools/materials before going to the "real" job site is a permanent workplace - the mileage from home to depot is commuting, but mileage from depot to job site is business mileage.
• The "no normal workplace" rule (EIM32130): some employees (district nurses, delivery drivers, mobile engineers) genuinely have no single permanent workplace - in that case every business journey from home is deductible at AMAP. The test is that the employee performs duties at multiple sites with no single base.
• Triangular travel (EIM32200): a journey from home to client A to client B to home is two business legs (A to B is in the course of duties; B to home includes the diversion via B, so the additional miles vs home-direct are business). Be careful of the home-to-A and home-from-B segments: if A is a temporary workplace they are deductible; if permanent, the home leg is commuting.

The 24-month rule is the most commonly mis-applied piece of the framework. HMRC has consistently held in EIM32100 - EIM32115 that breaking attendance for a few weeks and returning to the same site does not reset the 24-month clock - it picks up where it left off. Contractors who chain 6-month POs at the same desk for 3+ years have a permanent workplace. The clock only resets after a full 24-month gap.

8. Records HMRC expects

Mileage claims are evidence-based. HMRC manual EIM31330 makes the requirement explicit: a contemporaneous record of each business journey, retained for at least 5 years after the 31 January Self Assessment filing deadline of the relevant tax year. For 2026/27 that means the mileage log must be retained until 31 January 2033. For the self-employed, the same 5-year record-keeping requirement applies via section 12B TMA 1970.

The minimum content of each log entry:

• Date of the journey.
• Start location (postcode or address).
• End location (postcode or address).
• Business purpose: a meaningful description such as "Client meeting - Acme Ltd, project Phoenix" or "Site visit - 14 High Street, replace boiler". Generic entries like "client" or "meeting" fail HMRC scrutiny on appeal.
• Miles claimed, ideally backed by an odometer reading or a route-mapping screenshot.

Acceptable formats: a paper logbook, a spreadsheet, or one of the mainstream mileage-tracking apps (Driversnote, MileIQ, TripLog, the mileage feature in FreeAgent / Xero / QuickBooks). HMRC has no preferred format but the data fields above are non-negotiable. Estimates assembled at year end from calendar entries are not contemporaneous and have repeatedly been rejected on appeal - the log must be created journey by journey.

For passenger payments, the log must also record the names of the employees carried as business passengers. For simplified expenses on the self-employed side, the same log standard applies, plus retention of any receipts you might need if you ever switch from simplified to actual cost (since the choice is per vehicle and sticks for the life of the vehicle, switching usually means switching at point of buying a new vehicle).

9. Worked examples: four scenarios

The 2026/27 arithmetic for the four most common mileage situations. English rest-of-UK Income Tax bands assumed; the mileage rates apply identically across all four UK regions.

Example 1: Under-reimbursed employee, basic rate, 8,500 business miles

Profile: Aisha is a community outreach worker on £28,000 PAYE. Her employer reimburses business mileage at 25p per mile (about half of AMAP). In 2026/27 she drives 8,500 business miles visiting service users in their homes - all clearly "temporary workplaces" in HMRC terms (no single client takes up more than a few hours per week, and most are visited fewer than 10 times across the year).

AMAP entitlement: 8,500 x 45p = £3,825 (under 10,000 threshold throughout).
Employer reimbursement: 8,500 x 25p = £2,125.
MAR shortfall: £3,825 - £2,125 = £1,700.

At basic rate (20%), Aisha recovers £1,700 x 20% = £340 of tax. She is not in Self Assessment so she files a P87 online via her Personal Tax Account. HMRC adjusts her tax code to release the relief through her remaining monthly pay. She keeps a mileage log throughout the year in a spreadsheet, exported monthly and retained as a PDF backup. Total time per year for the logging-and-claim cycle: roughly 30 minutes per month plus 45 minutes for the year-end P87. Tax recovered per hour of effort: roughly £40 - more than her hourly wage.

Example 2: Self-employed plumber, simplified versus actual costs

Profile: Daniel is a self-employed plumber based in Reading. He drives a 3-year-old £14,000 Ford Transit Custom that he bought in 2026/27 for the business. Annual mileage 18,000 miles, all business (the van is registered as a goods vehicle and he has a personal car for private use). Actual running costs: fuel £3,800, insurance £900, road tax £290, MOT £55, servicing and repairs £680, tyres £400 = £6,125.

Simplified option: 10,000 x 45p + 8,000 x 25p = £4,500 + £2,000 = £6,500 deductible from trading profit.

Actual cost option: £6,125 running cost + Annual Investment Allowance on the £14,000 van in year 1 = £20,125 in year 1. From year 2 onwards: £6,125 running cost only (the van is fully written down), so simplified at £6,500 narrowly beats actual in year 2.

Daniel chooses actual cost in year 1 to capture the £14,000 AIA write-off (worth 6% NIC + 20% IT = roughly £3,640 of cash tax saved on top of what he would have saved under simplified). From year 2 onward he is locked into actual cost for this van (the BIM75001 rule), so he accepts the £375 per year shortfall versus simplified as the cost of having taken the AIA. Over a 5-year hold his net position is better than simplified by roughly £14,000 x 26% - 4 x £375 = £2,140. He logs every business journey for the record-keeping requirement and retains fuel and repair receipts.

Example 3: Motorcycle commuter to temporary client site

Profile: Priya is a freelance management consultant operating as a sole trader. 2026/27 contracts include a 6-month engagement with Client A (3 days a week on site in Birmingham, 47 miles each way from her home in Leamington) and a 4-month engagement with Client B (1 day a week on site in Coventry, 12 miles each way). Both clients well within the 24-month rule and well under the 40% threshold individually. Priya rides a motorcycle for both site visits.

Client A mileage: 47 miles x 2 x 3 days x ~25 weeks = 7,050 business miles.
Client B mileage: 12 miles x 2 x 1 day x ~17 weeks = 408 business miles.
Total business miles: 7,458.

Simplified expense at the motorcycle rate (24p flat): 7,458 x 24p = £1,790 deductible from trading profit.

Priya is on the basic rate (her freelance profit including this deduction puts her at £35,000 total taxable). The £1,790 mileage claim saves her £1,790 x (20% + 6%) = £465 of Income Tax + Class 4 NIC. She logs every journey in her phone (Driversnote app, free tier). If either client engagement extends past 24 months in future, that site flips to permanent and the morning commute becomes non-deductible - she sets a calendar reminder at month 21 of each engagement to reassess.

Example 4: Charity volunteer driver

Profile: Margaret is a retired teacher who volunteers 2 days a week for a local hospice charity, driving patients to and from medical appointments. She has no contract of employment - she is a pure volunteer. She covered 3,200 miles for the charity in 2026/27.

Reimbursement side: the charity reimburses Margaret at the AMAP rate of 45p per mile (well under the 10,000 threshold). 3,200 x 45p = £1,440 paid to Margaret tax-free. The charity does not need to operate PAYE on this reimbursement; it is a permitted AMAP payment under section 229 ITEPA 2003 (the section applies to "office-holders" as well as employees, and HMRC accepts charity volunteer drivers within the scheme on the reimbursement side provided the journeys are genuinely for the charity).

MAR side: Margaret is not an employee, so she cannot personally claim Mileage Allowance Relief if the charity under-reimbursed. The relief only flows to employees and office- holders under sections 230 to 235 ITEPA. In Margaret's case she is paid in full at AMAP so the question does not arise. If she had received only 30p per mile (a £480 shortfall) she would have no way to recover it personally - the only fix is to negotiate the reimbursement rate up with the charity. Charities that want to keep their volunteers whole should always pay AMAP, not below.

10. Common mistakes and the commuting exclusion

The most expensive mistakes in UK mileage claims, in order of how often HMRC challenges them:

• Claiming the morning commute as business mileage. Home to permanent workplace is never deductible. This is section 338 ITEPA, and HMRC compliance checks pull it out instantly. The fix: stop claiming it. If the workplace is genuinely temporary, document the temporary status (24-month / 40% tests) in writing as part of the mileage log.
• Estimating mileage after the fact. "I think I did about 6,000 miles" without a contemporaneous log fails HMRC scrutiny. Build the log in real time, journey by journey.
• Mixing up the 10,000-mile threshold across employers. The threshold is per individual per tax year, not per employer. Reconcile via SA at year end if you change jobs.
• Claiming AMAP on a company car. Company cars use Advisory Fuel Rates for the fuel element; AMAP is for personal-vehicle business use only. The two regimes do not overlap.
• Forgetting to switch off MAR claims when the employer is now reimbursing at full AMAP. A P87 claim that becomes habitual from a year when the employer reimbursed 25p does not survive a year when the employer moves to 45p. HMRC sees the change in employer mileage payments via RTI and queries the P87.
• Claiming for journeys where the "business purpose" is too vague. "Meeting" or "client" is not enough; HMRC wants enough detail to confirm the journey was genuinely for the trade or employment.
• Mixing private and business miles on the same trip. A detour to the supermarket on the way home from a client meeting does not extend the business segment to the supermarket. The business portion of the journey is the direct distance to and from the client; the detour miles are private.
• Claiming the 5p passenger payment as a passenger. The 5p goes to the driver, only from the employer, only for business passengers carried on the same business journey. Passengers cannot claim it.
• Switching simplified to actual mid-life of a vehicle. BIM75001 forbids this. The choice is locked once made until you change the vehicle.

The single biggest source of error remains the commuting exclusion. Read sections 338 and 339 ITEPA, read HMRC manual EIM32000 onwards, apply the 24-month and 40% tests to every workplace, and document the conclusion in writing. The records you keep are your defence in any compliance check.

Frequently asked questions

What are the HMRC approved mileage rates for 2026/27?

For 2026/27 the Approved Mileage Allowance Payments (AMAPs) remain unchanged from the long-standing schedule: cars and vans receive 45p per mile for the first 10,000 business miles in the tax year and 25p per mile for every mile above that; motorcycles receive a flat 24p per mile with no upper threshold; bicycles receive 20p per mile with no threshold. Employers can additionally pay 5p per mile for each business passenger carried in the same vehicle, tax-free. These rates have been frozen since 2011 despite fuel and motoring cost inflation - HMRC publishes them on the "rates and allowances: travel" page on gov.uk.

Can I claim mileage for my drive to work each morning?

No. The journey between home and your permanent workplace is "ordinary commuting" and is specifically excluded from the AMAP scheme by section 338 ITEPA 2003. HMRC manual EIM32055 sets out the rule. Mileage allowance only applies to business travel: journeys to a temporary workplace (one you attend for fewer than 24 months or for less than 40% of your working time), journeys between two workplaces, or journeys made in the course of duties (a salesperson visiting clients). A second permanent workplace creates a second commute, not business mileage - even if you work at both regularly.

What is a temporary workplace for mileage purposes?

A temporary workplace is one you attend for a limited duration or temporary purpose. HMRC sets two practical bright lines in EIM32080 - EIM32125: (1) if you attend the site for fewer than 24 months on a continuous basis it is temporary, (2) if it accounts for less than 40% of your working time it is temporary. The 24-month rule looks forward from the point you knew (or should have known) the assignment would exceed 24 months - so if a 30-month contract is signed on day one, the site is a permanent workplace from day one. If a 12-month contract is extended at month 18 to a total of 30 months, the site becomes permanent from the date of extension. Mileage to a temporary workplace is fully deductible at AMAP rates.

My employer pays only 30p per mile - can I claim the rest from HMRC?

Yes. The shortfall between the AMAP rate (45p for the first 10,000 car miles) and your employer's reimbursement is called Mileage Allowance Relief (MAR) and you claim it from HMRC via the P87 form (online or by post) or via the employment pages of a Self Assessment return. At 30p per mile on 8,000 business miles you would be short by 15p x 8,000 = £1,200 of allowance. As a basic-rate taxpayer that converts into £240 of tax repaid; as a higher-rate taxpayer, £480. You must keep a mileage log showing date, start, destination, business purpose and miles for every claimed journey.

What if my employer pays more than 45p per mile?

Any payment above the AMAP rate is taxable as employment income and must be reported on a P11D by the employer (or processed through payroll under the "payrolling benefits in kind" route). At 50p per mile on 8,000 business miles, the excess is 5p x 8,000 = £400 of additional taxable pay. HMRC will recover the tax through your code or via Self Assessment. The first 10,000 miles and the over-10,000 tranches are tested separately, so a flat 45p employer rate creates an excess once you pass 10,000 miles in the year (45p paid versus 25p approved). Many large employers stop at 25p above 10,000 to avoid this trip-up.

I am self-employed - should I use the 45p/25p rate or claim actual vehicle costs?

For self-employed sole traders and partners, the 45p / 25p / 24p / 20p AMAP rates are available as a "simplified expenses" option (HMRC manual BIM75001). Alternatively you can claim actual vehicle running costs (fuel, insurance, road tax, MOT, servicing, repairs, depreciation) apportioned by business-use percentage, plus capital allowances on the vehicle itself. You choose per vehicle, and once you elect simplified expenses for a vehicle you must keep using it for that vehicle until you change the vehicle. Simplified is far easier for low-cost cars at modest mileage. Actual costs plus capital allowances typically win for expensive cars, high-mileage drivers, vans with large running costs and electric vehicles where the Annual Investment Allowance can write off the full purchase price in year one.

Can I claim mileage for cycling to a client meeting?

Yes, at 20p per mile, with no cap on the number of miles in the year. The rate has been 20p since 2002 and applies to self-employed simplified expenses and to employer AMAP reimbursements alike. The same business-purpose test applies as for car mileage: the journey must be to a temporary workplace, between workplaces, or in the course of duties, not ordinary commuting. The Cycle to Work scheme (salary-sacrifice bike hire) is a separate relief and does not interact with the 20p mileage rate.

What records does HMRC expect for a mileage claim?

A contemporaneous mileage log covering every business journey: date, postcode or address of start and end, business purpose (e.g. "client meeting - Acme Ltd, ABC123"), and miles. HMRC manual EIM31330 makes clear that estimates after the fact are not acceptable. A spreadsheet or mobile app (Driversnote, MileIQ, the HMRC-recognised log templates) is fine. You also need to keep receipts for any actual-cost element if you ever switch from simplified to actual expenses. Records must be retained for at least 5 years after the 31 January Self Assessment filing deadline for the relevant tax year (so a 2026/27 log must be kept until 31 January 2033).

How does the passenger payment of 5p per mile work?

If your employer chooses to operate it, they may pay you an additional 5p per mile, tax-free, for each fellow employee carried as a business passenger on the same business journey. Two colleagues going to the same client meeting in your car generates 10p per mile of passenger allowance on top of the 45p AMAP. The passenger must be travelling for business purposes too. Employers are not required to pay it - it is permissive, not mandatory. Importantly, employees cannot claim a shortfall of passenger payments via MAR. The 5p rate is an employer-discretionary tax-free top-up only.

Are charity volunteer drivers covered by the AMAP rates?

Yes for the reimbursement side: a registered charity that reimburses a volunteer driver up to 45p per mile (first 10,000 then 25p) for business journeys made on the charity's behalf does so tax-free. However, an unreimbursed charity volunteer cannot claim MAR personally - section 234 ITEPA 2003 limits Mileage Allowance Relief to employees and office-holders, not volunteers without a contract of employment. Charities that want their volunteers covered need to put a reimbursement policy in place; HMRC takes no issue with paying the AMAP rate to a volunteer driver.

How do I file a P87 to claim Mileage Allowance Relief?

The P87 is HMRC's "tax relief for expenses of employment" form. You can submit it online by signing in to your Personal Tax Account, by post on the printed form, or as part of a Self Assessment return (employment pages, box 17 for mileage and other vehicle expenses). The online route is fastest - HMRC processes most P87 claims within 4 to 6 weeks. You need: National Insurance number, employer PAYE reference (top of payslip), total business miles in the year, total reimbursement received from the employer, and a mileage log on file in case HMRC asks. HMRC repays the tax by adjusting your PAYE code for the current year, or by direct refund for closed prior years. P87 claims can go back 4 tax years.

Does the 24-month rule reset if I leave and return to the same site?

No. HMRC manual EIM32100 - EIM32115 sets the rule: a site you have attended in the past 24 months that you return to within 24 months is treated as a continuation, not a fresh assignment, and the clock keeps running. The reset only happens after a full 24-month gap. The point is to stop contractors flipping a site from permanent back to temporary by a short break. Combined with the 40% test, this catches a lot of long-standing "temporary" placements - a contractor who has been on the same client site for 30 months at the same desk, even on a chain of separate 6-month POs, has a permanent workplace and the morning drive is non-deductible commuting.

Related

• UK mileage tax relief calculator (MAR via P87 / SA)
• Capital allowances calculator (AIA, FYA, WDA on vehicles)
• Self-employed tax calculator (Class 2 + Class 4 NIC)
• UK side hustle tax guide (trading allowance, DAC7)
• Self Assessment step-by-step guide
• Cycle to Work scheme explainer
• Company car tax (BIK) calculator
• HMRC penalties guide
• Methodology and gov.uk sources