Mileage Allowance 2026/27 — 55p per Mile, AMAP Rates & Tax Relief

Mileage allowance — formally the Approved Mileage Allowance Payments (AMAP) scheme — is the tax-free amount employers can pay employees who use their own car for business travel. From 6 April 2026, the 2026/27 rate is 55p per mile for the first 10,000 business miles in a car or van, then 25p per mile beyond that, with 24p a mile for motorcycles and 20p a mile for bicycles. If your employer pays less than the AMAP rate — or nothing at all — you can claim Mileage Allowance Relief on the difference. Work out exactly what you can claim with the Mileage Allowance Calculator→.

This guide explains how the two-tier 55p/25p structure works, what counts as business travel, how the relief is claimed through Self Assessment or a tax code adjustment, and the separate Advisory Fuel Rates that apply to company car drivers.

The 2026/27 AMAP Rates

The AMAP rate is intended to cover the running cost of a car — fuel, insurance, servicing, tyres, depreciation and breakdown cover. The drop to 25p after 10,000 miles reflects the fact that fixed costs are largely covered by the first 10,000 miles, leaving mainly variable fuel and maintenance costs. The passenger rate of 5p per mile is a separate allowance for each fellow employee carried on a business journey, paid on top of the driver's rate.

How the Two-Tier Rate Works

The 10,000-mile threshold is a per-tax-year figure per car, so the clock resets every 6 April. It does not reset when you change cars or employers — HMRC tracks your cumulative business miles across all employers in the tax year, though in practice each employer applies the threshold to the miles it reimburses and the position is reconciled if you submit a Self Assessment claim.

Example: 15,000 business miles. First 10,000 miles at 55p = £5,500; next 5,000 miles at 25p = £1,250. Total allowance: £6,750. If your employer paid a flat 30p per mile, you received £4,500, so you can claim relief on the £2,250 shortfall — at a 20% tax rate that is £450 of tax relief, or £900 at 40%.

What Counts as Business Travel

Business travel is a journey you make in the course of your employment that your employer requires — visiting clients, travelling between sites, attending meetings off-site. It excludes the ordinary commute from home to your permanent workplace, which is never eligible for AMAP, and it excludes any private element of a mixed journey unless the private detour is incidental. For employees with no fixed place of work — such as community nurses or travelling salespeople — journeys from home to the first assignment and back from the last one generally count as business mileage, because the home is treated as the workplace. Keeping a contemporaneous mileage log with dates, destinations, mileages and journey purpose is essential: HMRC can ask for it, and without it a claim collapses.

Claiming Mileage Allowance Relief

If your employer pays less than the AMAP rate, the shortfall is claimed as Mileage Allowance Relief (MAR) in one of two ways: through the Self Assessment return if you file one, or by calling HMRC or using your online account to have the tax code adjusted, which spreads the relief across the year through PAYE. The relief is worth the shortfall multiplied by your marginal rate — 20% for basic-rate taxpayers, 40% for higher-rate. Claims can be backdated for up to four tax years, so a driver who has never claimed can recover four years of relief in a single application.

Company Cars and Advisory Fuel Rates

The AMAP scheme does not apply to company car drivers — you cannot claim the own-vehicle AMAP rate for a car your employer provides. Instead, if you pay for fuel or electricity yourself, your employer can reimburse you at HMRC's Advisory Fuel Rates, which are published quarterly and vary by engine size and fuel type. If your employer reimburses less than the applicable rate, you may be able to claim tax relief on the shortfall; if it reimburses more, the excess is normally taxable. Unlike AMAP, advisory rates cover fuel or electricity only — depreciation, insurance and servicing are handled through the company car benefit-in-kind charge.

Self-Employed Drivers and Simplified Expenses

The AMAP scheme is an employee concept, but self-employed people and partners get an equivalent: simplified expenses. Instead of apportioning actual car costs between business and private use, a sole trader can deduct a flat 55p per mile for the first 10,000 business miles and 25p after — identical rates, applied to the same 10,000-mile annual threshold for 2026/27. The trade-off is that simplified expenses replace everything: fuel, insurance, servicing, depreciation and, for cars, any capital allowance claim. Once you elect for the flat rate on a vehicle you must use it consistently; you cannot switch to actual costs mid-claim for the same car, though you can choose per vehicle if you run more than one. A driver doing 8,000 business miles claims £4,400 (55p × 8,000) before tax, without separately deducting fuel or servicing receipts.

Electric Cars and the Mileage Rates

The 55p and 25p AMAP rates apply equally to electric and petrol or diesel cars. The rates are set by HMRC and can change, so use the rate for the relevant tax year. One caveat: if you claim the AMAP rate you cannot separately claim for home charging, public charging or any other running cost for the same own-vehicle mileage, because the flat rate is designed to cover running costs.

Staying Claim-Ready

For a mixed fleet, keep separate policies for private cars, company cars, vans, pool vehicles and motorcycles. Do not copy one rate across the fleet merely because the journey is the same.

Retain the log, expense claim and official rate table for the same tax year.

The mileage log is the primary evidence

Record the date, route, destination, business purpose, vehicle, business miles and amount reimbursed at the time of the journey. Separate ordinary commuting from travel between workplaces, temporary workplaces and client sites. A route that is convenient for work is not automatically a qualifying business journey.

Reconcile the log to expense claims, payroll and any fuel or charging evidence. Company-car, pool-car, van and motorcycle rules must not be replaced with a private-car rate. If the employer reimburses less than the approved amount, any relief claim has its own conditions; if the employer pays more, the excess needs review. Keep the official rate table used for the tax year.

Review the record after a workplace move, vehicle change, hybrid-working change or new client engagement. Preserve the original log and corrected version if an error is found.

The log should distinguish commuting from business travel.

The mileage log should be retained with the expense claim and the official rate used, not reconstructed only when HMRC asks.

Mileage records that survive a review

Keep a contemporaneous mileage log showing the date, start and end points, business purpose, vehicle, business miles and amount reimbursed. A monthly total without destinations may be difficult to support. Separate ordinary commuting from business travel between workplaces, temporary workplaces and client sites; the label “work journey” is not enough to decide the tax treatment.

Reconcile the log to expense claims, fuel receipts where relevant and the employer's payroll records. The approved mileage allowance payment system is a method for assessing the tax position, not a promise that every journey qualifies. If the employer pays less than the approved amount, the employee may have a relief claim subject to the rules; if the employer pays more, the excess may need separate treatment.

For company cars, pool cars, vans and motorcycles, use the rules for that vehicle rather than applying a private-car rate automatically. Review the record when the employee changes vehicle, work location or employment. Keep the official rate page used for the tax year alongside the mileage policy and claims.

Close the schedule at each tax year and reconcile it to the employer statement, payslips and bank payments. If the employer paid less than the approved rate, calculate the shortfall by tax year and preserve the statement showing what was actually reimbursed. If the employer paid more, do not claim the full approved rate again; first identify the payroll treatment of the excess and the vehicle-specific rule that applies.

When changing vehicle, employer or work pattern, use an effective date and keep the old log rather than overwriting it. Company-car mileage, passenger payments, advisory fuel rates and self-employed simplified expenses are separate routes from an ordinary employee AMAP claim. A calculator can compare scenarios, but the journey evidence and taxpayer status determine the available rate and relief.

Frequently Asked Questions

Calculate your exact mileage allowance and relief with the Mileage Allowance Calculator→, then compare with the Company Car BIK guide→ if you are choosing between a personal car and a company car for 2026/27.

Official sources

• GOV.UK: Travel, mileage and fuel rates and allowances
• GOV.UK: Tax relief for employees — vehicles you use for work
• GOV.UK: Increase to Approved Mileage Allowance Payments and self-employed simplified mileage rates