Is mileage relief a refund of the full amount?

No — it's tax relief, so you get back the tax you would have paid on that amount, not the amount itself. HMRC's own example: claim 60 pounds of expenses and pay tax at 20%, and you get 12 pounds back (20% of 60). On mileage, relief on a 1,100 pound shortfall is worth about 220 pounds to a 20% taxpayer, or 440 pounds at 40%.

How does an employee claim mileage tax relief?

Using HMRC's form P87 — online through your Government Gateway account, or by post. If your total expenses claim for the year is more than 2,500 pounds, you claim through a Self Assessment tax return instead. You can claim for the current year and the 4 previous tax years.

Does Making Tax Digital affect employees claiming mileage?

No. Making Tax Digital for Income Tax applies to self-employed people and landlords, not employees. It is phased in by income: 50,000 pounds from April 2026, 30,000 pounds from April 2027 and 20,000 pounds from April 2028. If you're a sole trader it means keeping digital records and filing quarterly — so a tidy digital mileage log matters more than ever.

UK rules · 2026/27 · every rule sourced

Claiming Mileage Tax Relief as an Employee (the P87)

Q: Can an employee claim mileage if the employer already pays some?

Yes. If your employer pays you less than HMRC's approved rate (55p a mile for the first 10,000 business miles in 2026/27, 25p after), you can claim tax relief on the difference. If they pay nothing, you can claim relief on the whole approved amount. If they pay the approved rate or more, there's nothing left to claim.

Q: What records do I need?

Keep a record of the dates and mileage of your work journeys, and of anything your employer paid you towards them. You don't claim fuel receipts for the mileage relief itself — the per-mile rate covers your running costs.

If you drive your own car for work as an employee and your employer pays you less than HMRC's approved rate — or nothing — you're owed tax relief on the gap. Here's how it works, the one thing most people get wrong about what you actually get back, and how to claim it. Every rule links to GOV.UK.

Short answer: the approved rate is 55p a mile for the first 10,000 business miles (25p after). If your employer pays less than that, you claim tax relief on the difference — via HMRC's form P87. But it's relief, not a refund: you get back the tax on that amount (around 20% of it at the basic rate), not the amount itself.

By Alpesh Patel, Keepwright · published 29 June 2026

What you can claim

As an employee, when you use your own car for business journeys HMRC sets an approved rate — 55p a mile for the first 10,000 business miles, then 25p (2026/27). If your employer reimburses you at less than that rate, you can claim tax relief on the difference; if they pay you nothing for business mileage, you claim relief on the whole approved amount.

The sum HMRC uses is simple: your business miles × the approved rate, minus anything your employer already paid you. That figure is what your relief is calculated on. (Ordinary commuting — home to a permanent workplace — doesn't count; only genuine business journeys do.)

It's relief, not a refund — what you actually get

This is the part most people misread, so it's worth being plain about. You don't get the shortfall back in full — you get tax relief on it, which means you get back the tax you would otherwise have paid on that amount. HMRC's own example: claim £60 of expenses and pay tax at 20%, and you get £12 back (20% of £60).

Put that on real mileage:

Your situation	Relief is calculated on	You get back (20% / 40%)
2,000 business miles, employer pays nothing	2,000 × 55p = £1,100	~£220 / ~£440
2,000 business miles, employer pays 30p/mile	2,000 × (55p − 30p) = £500	~£100 / ~£200
Employer already pays 55p/mile or more	£0 — nothing left to claim	£0

So it's real money, but it's the tax on the gap, not the gap itself. Worth knowing before you do the sum and expect the larger number.

How to claim — the P87

You claim using HMRC's form P87 — online through your Government Gateway account, or by post. A few things worth knowing:

The £2,500 line. If your total expenses claim for the year is £2,500 or less, the P87 is the route. If it's more than £2,500, you claim through a Self Assessment tax return instead.
You can go back. You can claim for the current tax year and the 4 previous tax years, as long as you paid tax in the year you're claiming for.
How you get it. For the current year HMRC usually adjusts your tax code so you pay less tax; for past years it adjusts the code or gives you a refund.

The records you keep

The claim rests on a record of the dates and mileage of your work journeys, plus anything your employer paid you towards them. You don't submit fuel receipts for the mileage relief itself — the per-mile rate is designed to cover your running costs. What HMRC wants is the journeys: where, when, why, and how far — kept as you go, not reconstructed at year-end.

What Making Tax Digital changes (and who it's for)

One thing to clear up: Making Tax Digital for Income Tax doesn't apply to employees — it's for the self-employed and landlords. If that's you (or you have a side trade), it's being phased in by income: £50,000 from April 2026, £30,000 from April 2027, and £20,000 from April 2028.

What it means in practice is digital record-keeping and quarterly updates rather than one annual return. For mileage, that raises the bar on keeping a clean, contemporaneous, digital log — a shoebox of guesses won't survive quarterly filing. Whichever side you're on, the habit is the same: capture the journeys as they happen.

Common questions

Can I claim if my employer already pays me some mileage?

Yes — if they pay less than the approved rate (55p first 10,000 miles, 25p after), you claim tax relief on the difference. If they pay nothing, you claim on the whole approved amount. If they pay the approved rate or more, there's nothing left to claim.

Is it a refund of the full amount?

No — it's tax relief, so you get back the tax on that amount, not the amount itself. HMRC's example: claim £60 at a 20% tax rate and you get £12 back. Relief on a £1,100 shortfall is worth about £220 to a 20% taxpayer, £440 at 40%.

How do I actually claim it?

With HMRC's form P87 — online via Government Gateway or by post. If your total expenses for the year top £2,500 you use Self Assessment instead. You can claim for the current year and the 4 previous tax years.

What records do I need?

The dates and mileage of your work journeys, plus anything your employer paid you. Not fuel receipts — the per-mile rate covers running costs; what matters is the log of journeys.

Does Making Tax Digital affect me?

Only if you're self-employed or a landlord — not as an employee. For the self-employed it phases in at £50k (Apr 2026), £30k (Apr 2027) and £20k (Apr 2028), and means digital records + quarterly filing.

Work out your own figure

Put your business miles into the free UK mileage calculator to see the approved amount, then read the full UK mileage allowance rules or, if you run a company, claiming mileage through your limited company. Mileage Tracker keeps the journey log on your phone, pay-once.

This is general information, not tax advice. Rules and rates can change and were correct at publication (29 June 2026) — check your own position with HMRC or your accountant. Sources are linked throughout.