Mileage tax relief, now 55p a mile

What changed on 6 April 2026

For the first time since 2011, the approved mileage rate went up. Use your own car or van for work and the first 10,000 business miles of the tax year are now worth 55p a mile. They were worth 45p.

Above 10,000 miles nothing moved. Those miles are still 25p. HMRC published the new figures on 21 May 2026 and they apply from 6 April 2026, the start of the current tax year. The rate table sits in HMRC's Employment Income Manual, alongside the published rates and allowances.

Most mileage pages and calculators online still say 45p. That is not carelessness so much as inertia: 45p was correct for fifteen tax years running, from 2011-12 to 2025-26, and a number that has not moved in that long stops getting checked. Look for a date on any page that quotes you a rate.

Motorcycles and bicycles were left alone. A motorcycle is 24p a mile and a bicycle is 20p a mile, on every business mile, with no 10,000-mile step in either.

How the relief works

Start with what the rate actually is. 55p a mile is the most your employer can pay you for business mileage without any of it being taxed. It is not a payment from HMRC, and nobody sends you 55p for driving.

Plenty of employers pay less than the approved rate, and some pay nothing at all. If you were paid under the approved amount across the tax year, you can claim relief on the difference. That is the whole mechanism, and it is set out in HMRC's manual at HMRC's own outline of the relief.

The word relief is doing a lot of work in that sentence. It is not a refund of the shortfall. It takes the shortfall off your taxable income, so what reaches your account is the shortfall multiplied by the rate you pay tax at. gov.uk puts it plainly: you get relief based on what you have spent and the rate at which you pay tax, and its own worked example turns £60 of expenses into £12 for a basic-rate taxpayer.

So the arithmetic runs in two stages. Say you drove 8,000 business miles and your employer paid you 25p a mile:

• The approved amount is 8,000 miles at 55p, so £4,400.
• Your employer paid 8,000 miles at 25p, so £2,000.
• The shortfall is £2,400.
• At basic rate you receive 20 per cent of that shortfall, so £480. At higher rate, £960.

£2,400 is the number most pages stop at. £480 is the number that turns up. Both are worth knowing, and only one of them is money.

Two things follow from the same rule. If your employer already pays the full 55p and 25p, there is nothing to claim and no page should suggest otherwise. If your employer pays more than the approved amount, the excess is added to your pay and taxed as earnings, and it counts towards National Insurance as well.

What counts as a business mile

Not your commute. Travel between home and your normal workplace is ordinary commuting, and it is never business travel, however far it is or however early you leave.

What does count is travel to a temporary workplace: somewhere you attend for a task of limited duration or some other temporary purpose. A client site, a supplier, a training venue, a second office you are covering for a few weeks.

There is a limit on how temporary a temporary workplace can stay. Under the 24-month rule, a workplace stops being temporary once you attend it in a period of continuous work that lasts, or is likely to last, more than 24 months, with 40 per cent or more of your working time spent there. At that point it is your permanent workplace and the journeys become ordinary commuting.

Carrying colleagues

If you take colleagues with you on a business journey, your employer can pay you a further 5p a mile for each passenger, tax free. That rate was not part of the 2026 increase.

The passenger rate has a sting the driver rate does not. There is no relief on it. If your employer pays you less than 5p a passenger, or nothing, there is nothing to claim back. The shortfall mechanism does not exist here, and any page telling you to claim the difference on passengers is wrong.

How to claim it yourself

Free, and one sitting for most people:

1. Total your business miles for the tax year, with dates, journeys and the reason for each one.
2. Work out the approved amount at 55p and 25p, then subtract everything your employer paid you for mileage.
3. If your total claim for employment expenses that year is £2,500 or less, use HMRC's service for tax relief on job expenses, online or by post on form P87. If you have claimed the same type of expense in an earlier year and you are under £2,500, you can do it by phone.
4. If the claim comes to more than £2,500 for the year, it has to go on a Self Assessment return instead. That £2,500 is the total of all your employment expenses for the year, not mileage on its own.

For the current tax year, HMRC usually adjusts your tax code so you pay less tax over the rest of the year rather than sending money. Earlier years are settled separately.

Backdating four years

You have four years from the end of the tax year you are claiming for. In August 2026 that means the current 2026-27 year plus 2025-26, 2024-25, 2023-24 and 2022-23: five years of mileage in one go if you have never claimed.

The oldest of those, 2022-23, closes on 5 April 2027. After that it is gone, and 2023-24 becomes the oldest year you can reach.

Backdated years are worked out at the rates that applied at the time, which were 45p and 25p in every year from 2011-12 to 2025-26. The 55p only reaches miles driven on or after 6 April 2026.

The traps people fall into

• Reading 55p as cash: the rate sets what can be paid to you tax free. Where your employer falls short, the relief hands back your tax rate on the gap, not the gap.
• Applying it to a company car: the approved rates are for a vehicle you own. Company car drivers are covered by a separate fuel-only rate table that HMRC revises every quarter and bands by engine size and fuel type.
• Expecting National Insurance back: the relief only ever touches income tax. There is no National Insurance version of it, and you cannot carry an underpayment forward into a later pay period either.
• Using one rate for every mile: 55p stops at 10,000 miles. A 15,000-mile year is £5,500 plus £1,250, so £6,750 of approved amount, not £8,250.
• Counting the commute: home to your normal workplace is not a business mile, and adding it is the fastest way to have a claim queried.

One more thing worth watching: the government has said the approved rates are under review beyond the 2026 to 2027 tax year, with the outcome to be set out at the Budget in 2026. If you drive a lot for work, it is worth a look when that lands.

How Untap helps

There is no mileage wizard here yet. This page and the estimator above are the whole of what we can do on mileage today, and both are free.

What Untap does keep is the rest of the list. Talk to Nell, our voice agent, answer a few questions about your situation once, and she tells you which of the other reliefs and refunds apply to you and which years are still open. The forms stay yours; we never file anything on anyone's behalf.

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