HMRC Mileage Rates 2026/27: 45p Is Now 55p

Q: How much is the increase actually worth to me?

Ten pence for every business mile up to 10,000, so £1,000 a year at the tier and nothing above it. Someone driving 30,000 business miles gains exactly the same £1,000 as someone driving 10,000, because the extra 20,000 miles are paid at 25p now and were paid at 25p before. The increase is capped by the tier rather than by your mileage.

Q: Does the 55p rate apply to my commute?

No. Travel between home and a permanent workplace is ordinary commuting and never qualifies, however far it is. What counts is travel to a temporary workplace, or between workplaces during the day. This is the single most common reason a claim is refused, and it catches people whose job genuinely involves a lot of driving but whose longest journey each day is the one to their usual office.

Q: Do I use a tax return or a form?

If you already complete a Self Assessment return, the claim goes on the return. If you do not, there is a separate claim route for employment expenses. Either way you need a record of the journeys rather than a single annual total: dates, start and end points, and the business reason. HMRC asks for the detail when a claim is large or unusual, and a reconstructed figure is hard to defend.

Q: What if my employer pays more than 55p?

The excess above the approved amount is treated as pay and taxed in the ordinary way. The approved rates mark the line below which a mileage payment is tax-free rather than a cap on generosity, so an employer can pay 70p if it wants to — you simply pay tax on the 15p. Nothing is lost by it, but it will show up in your figures and surprise you if you were not expecting it.

The approved mileage rate for a car or van is 55p for each of the first 10,000 business miles in the tax year and 25p for every mile after that. Motorcycles are 24p and bicycles 20p. The 55p replaced 45p on 6 April 2026, the first movement in the figure since 2011, and if your employer is still paying the old rate the difference is yours to claim rather than theirs to keep.

The Rates, and the Tier That Does the Real Work

Approved Mileage Allowance Payments exist so that an employer can reimburse you for using your own vehicle without either of you paying tax on the money. The rate is not a wage and not a reimbursement of petrol alone; it is meant to cover fuel, insurance, servicing, tyres and the depreciation that comes from putting work miles on a car you own.

Vehicle	First 10,000 miles	Over 10,000 miles
Car or van	55p	25p
Motorcycle	24p	24p
Bicycle	20p	20p

Only the first line changed. The 25p second tier is exactly where it was, and the motorcycle and bicycle rates did not move either. That asymmetry is the whole story of this increase, and it decides who benefits and by how much.

The Rise Is Worth £1,000, and Not a Penny More

Ten extra pence a mile sounds like it should reward the people who drive most. It does the opposite. Because the increase applies only below the 10,000-mile tier, the benefit stops growing the moment you cross it.

Business miles	Old rates	New rates	You gain
2,000	£900	£1,100	£200
5,000	£2,250	£2,750	£500
10,000	£4,500	£5,500	£1,000
20,000	£7,000	£8,000	£1,000
30,000	£9,500	£10,500	£1,000

A district nurse covering 30,000 miles a year gains precisely what a consultant covering 10,000 gains, because the extra 20,000 miles are paid at 25p now and were paid at 25p before. The increase is capped by the tier, not by your effort, and the people whose vehicles take the heaviest punishment get the smallest proportional benefit from it.

Line chart showing the blended mileage rate falling from 55p at 10,000 miles to 45p at 15,000 and 35p at 30,000

At 15,000 Miles You Are Back Where You Started

The headline rate describes the first ten thousand miles and nothing else, so the figure that actually matters to a high-mileage driver is the blended rate — the total divided by the miles.

Business miles	Total payable	Blended rate per mile
10,000	£5,500	55.0p
12,000	£6,000	50.0p
15,000	£6,750	45.0p
20,000	£8,000	40.0p
30,000	£10,500	35.0p

At exactly 15,000 business miles the blended rate is 45p — the number that was the headline until April. Drive further than that and the new, more generous scheme pays you less per mile than the old scheme's headline figure suggested, which is a strange thing to be true of a pay rise and is worth knowing before you agree a mileage policy built around “the HMRC rate”.

If you want to see what those miles cost you rather than what they pay you, our fuel cost calculator works the other direction, from pence per litre and miles per gallon.

If Your Employer Still Pays 45p, the Gap Is Yours

The approved rate is a ceiling on tax-free reimbursement, not an obligation. An employer may pay less, and a great many mileage policies name 45p for the simple reason that they were written when 45p was the number. Where you are paid below the approved amount, the shortfall attracts Mileage Allowance Relief, and the relief arrives at your own marginal rate.

Business miles	Approved amount	Paid at old rates	Shortfall	Relief at 20% / 40%
2,000	£1,100	£900	£200	£40 / £80
5,000	£2,750	£2,250	£500	£100 / £200
10,000	£5,500	£4,500	£1,000	£200 / £400

Relief is not the same as the shortfall itself, and the difference disappoints people who expect a cheque for £1,000. You are being given tax back on money you were never paid, so a basic-rate taxpayer recovers a fifth of the gap. That is still £200 for filling in a form once, on miles you have already driven.

Where an employer pays nothing at all, the whole approved amount is claimable: 10,000 miles produces a £5,500 claim and £1,100 of relief at the basic rate. If working out your own marginal rate is the uncertain part, the difference between marginal and effective rates is the thing to be clear on first.

Four Years Back, at the Rates That Applied Then

A claim can reach the current tax year and the four before it, which for most people is the largest number in this article. The trap is that the earlier years are claimed at their own rates: 45p for everything up to 2025/26, and 55p only from April 2026.

Take someone driving 8,000 business miles a year whose employer pays 25p a mile. For 2026/27 the approved amount is £4,400 against £2,000 paid, a shortfall of £2,400. For each of the four earlier years the approved amount was £3,600, a shortfall of £1,600. The five years together come to £8,800 of shortfall — £1,760 of relief at the basic rate and £3,520 at the higher rate.

That is a meaningful sum arriving from paperwork rather than from driving another mile, and the window closes one year at a time. The 2022/23 year drops out of reach at the end of this tax year and does not come back.

The Passenger Rule Works the Other Way Round

There is a second rate that almost nobody claims: 5p per passenger per mile, payable when you carry colleagues on a journey that is work travel for them too. Four people in a car for 200 miles is £30 on top of the mileage.

It behaves differently from everything above, and the asymmetry is worth stating plainly because it is genuinely counter-intuitive. With mileage, being underpaid gives you something to claim. With passenger payments it does not — HMRC's guidance says there is no relief if you receive less than 5p or nothing at all. An employer that declines to pay it has not created a claim; the money is simply gone.

So the passenger rate is one to raise with an employer rather than with HMRC, and it is the only part of this that you cannot fix afterwards.

What Counts, and What Quietly Does Not

Ordinary commuting never qualifies. Travel between your home and a permanent workplace is not business mileage however long it takes, and this excludes more journeys than people expect — including, for many, the longest drive of their week.

What does count is travel to a temporary workplace, and travel between workplaces in the course of a day. The distinction turns on whether the place is somewhere you attend for a limited duration or a specific task rather than as your regular base.

Keep the record as you go, journey by journey: date, where you went and why, and the distance. A single annual mileage total is the hardest kind of claim to defend, because it cannot be checked against anything. The record is also the part people cannot reconstruct four years later, which is why the backdated claim is so often smaller than it should have been.

Questions About Mileage Rates and Relief

What is the HMRC mileage rate for 2026/27?

My employer still pays 45p. Can I claim the difference?

Yes. The approved rate is a ceiling on what an employer can pay you tax-free, not an instruction to pay it, and plenty of mileage policies still name 45p because that is what they were written around. Where you are paid less than the approved amount you can claim Mileage Allowance Relief on the gap, and the relief comes back at your own tax rate. On 10,000 business miles the gap is exactly £1,000, which is £200 back for a basic-rate taxpayer and £400 for a higher-rate one.

How much is the increase actually worth to me?

Does the 55p rate apply to my commute?

How far back can I claim?

The current tax year and the four before it. The earlier years are claimed at the rates that applied then, so a claim reaching back to 2022/23 uses 45p for those years and 55p only for 2026/27 — mixing them up is the quickest way to have a claim queried. Someone driving 8,000 business miles a year whose employer pays 25p has a shortfall of around £8,800 across five years, which is £1,760 of relief at the basic rate.

Do I use a tax return or a form?

What if my employer pays more than 55p?

I carry colleagues. Does that change anything?

There is a separate 5p per passenger per mile that an employer may pay for carrying fellow employees on a journey that is also work travel for them. It works in only one direction, though: HMRC's guidance is explicit that there is no relief if you receive less than 5p or nothing at all. So an unpaid passenger payment is simply lost, which is the opposite of how the mileage shortfall works and catches people who assume the two behave the same way.