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UK Mileage Allowance Rules, Explained (2026/27)
A plain-English guide to how the UK mileage allowance actually works — the rates, what counts as a business mile, and how you claim depending on whether you're an employee, a company director, or a sole trader. Every rule links to its source on GOV.UK.
Short answer: you can claim 55p per mile for the first 10,000 business miles in the tax year and 25p after, for a car or van you own. How you receive it depends on your situation — paid by an employer or your company tax-free, or claimed on your Self Assessment — but the per-mile rate is the same.
What the mileage allowance is
If you use your own vehicle for business, HMRC lets you claim a single flat rate per mile instead of working out the real cost of running the car. That one rate is meant to cover everything — fuel, servicing, insurance, road tax, depreciation — so for the claim itself you don't itemise petrol or wear and tear. You count business miles, multiply by the rate, and that's your claim. (One exception, if you're VAT-registered: you keep fuel receipts to reclaim the VAT — covered below.)
The official name is the Approved Mileage Allowance Payment, or AMAP. It's deliberately simple, and for most people who drive their own car for work it's both easier and worth more than trying to apportion actual motoring costs.
The 2026/27 rates
From the 2026/27 tax year the approved rates are:
| Vehicle | First 10,000 business miles | Over 10,000 miles |
|---|---|---|
| Car or van | 55p | 25p |
| Motorcycle | 24p | 24p |
| Bicycle | 20p | 20p |
Two things to know about the car-and-van rate. First, it steps down to 25p once you pass 10,000 business miles in the tax year, and the count resets each year. Second, the 55p figure is new: it rose from 45p on 6 April 2026 — the first change since 2011 — so if you're working from an older guide, check you're using the current rate. There's also a 5p per mile payment for carrying a colleague on the same business trip. All of these are published on the GOV.UK travel and mileage rates page.
What counts as a business mile
This is the rule people get wrong most often, and it's the one that decides every claim. A business journey is a trip you make for the work — to a client, a supplier, a meeting, or a temporary workplace. Those miles count.
Your ordinary commute does not. Travel between home and a regular, permanent workplace is private as far as HMRC is concerned — its own list of what you can't claim includes "travel between home and work". If a single trip mixes business and private travel, only the business part counts. The simplest test: were you going there to do the work, or just getting yourself to your usual desk?
How you claim — by how you work
The rate is the same for everyone; the route to claiming it depends on your situation.
Employee. If your employer pays you a mileage rate, it's tax-free up to the approved amount — a Mileage Allowance Payment. If they pay you less than the approved amount, or nothing, you can claim the difference back yourself as Mileage Allowance Relief through HMRC.
Director of your own limited company. Your company pays you a Mileage Allowance Payment for business miles in your own car — tax-free in your hands up to the approved amount, and a legitimate cost for the company. Pay above the approved rate and the excess is taxable; pay below it and you can claim Mileage Allowance Relief on the shortfall.
Sole trader (self-employed). You claim it on your Self Assessment. You can use HMRC's flat per-mile rate — its simplified expenses — instead of working out the actual running costs of the vehicle. Whichever you choose for a vehicle, you stick with it for that vehicle.
The records HMRC expects
A claim is only as good as the record behind it. For the mileage method, the record that matters is a log of the journeys. For each business trip, that means the date, where you went (start and end — employees are asked for the postcodes), the business reason, and the miles. Keep a running total too, because the rate steps down after the first 10,000 business miles in the year.
The one VAT exception. You don't keep fuel receipts for the mileage claim itself — but you do if you're VAT-registered and reclaiming the VAT on the fuel element of your mileage. HMRC requires you to hold enough fuel (VAT) receipts to cover the VAT you reclaim (unless the fuel is bought on a company card) — see VAT Notice 700/64. So: a journey log for the mileage claim, plus fuel receipts if you're also reclaiming the VAT.
The honest difficulty isn't the sum — it's keeping that log faithfully, trip after trip, so the figure still stands up months later if anyone asks. A contemporaneous record made at the time is worth far more than a number reconstructed from memory in January.
Common questions
Who can claim the UK mileage allowance?
Anyone who uses their own vehicle for business journeys: employees, company directors and the self-employed. Employees and directors receive it (or claim relief) via Mileage Allowance Payments and Mileage Allowance Relief; sole traders claim it on Self Assessment. The per-mile rates are the same for all.
What journeys count as business mileage?
Journeys made for the work — to a client, supplier, meeting or temporary workplace. Ordinary commuting between home and a permanent workplace doesn't count; GOV.UK lists "travel between home and work" among the costs you can't claim.
Can I claim mileage through my limited company?
Yes — your company can pay you a Mileage Allowance Payment for business miles in your own car, tax-free up to the approved amount and deductible for the company. If it pays less, you can claim the difference as Mileage Allowance Relief.
Do I need receipts to claim mileage?
For the flat-rate method itself you keep a record of the journeys — date, destination, reason, miles — rather than fuel receipts. One exception: if you're VAT-registered and reclaiming the VAT on your fuel, you also need to keep fuel (VAT) receipts to cover the VAT you reclaim.
What's the difference between a Mileage Allowance Payment and Mileage Allowance Relief?
A Mileage Allowance Payment is what an employer or your own company pays you, tax-free up to the approved amount. Mileage Allowance Relief is the tax relief you claim yourself when you're paid less than the approved amount — it covers the shortfall.
Work out your own claim
Put your miles into the free UK mileage calculator — it already uses the correct 55p / 25p rates. Not sure of your annual miles? The yearly mileage calculator estimates them. Want the human version of all this, with a real example? Read how I claim my own business mileage. Or see Mileage Tracker, the pay-once app that keeps an audit-ready log on your phone.
This is general information, not tax advice. The rules and rates can change and were correct at publication (26 June 2026) — check current figures with HMRC or your accountant. Sources are linked throughout.