The rate went to 55p and most of the internet has not caught up
The Approved Mileage Allowance Payment for the first 10,000 business miles is 55p from 6 April 2026. It was 45p before that, and it had been 45p since 2011.
Fifteen years of stability is exactly why the change has not propagated. GOV.UK did not update its own rates page until 21 May 2026, six weeks into the tax year, and its page now carries both figures on one line: 55p from 6 April 2026, 45p before. A great deal of employer policy, expense software and published advice is still quoting the old number.
The full set for 2026/27:
- Cars and vans: 55p for the first 10,000 business miles, then 25p
- Motorcycles: 24p, flat, at any mileage
- Bicycles: 20p, flat, at any mileage
- Passengers: 5p per business passenger per mile, if the employer pays it
The part that costs people money: relief is not a refund
If your employer pays less than the approved rate, you can claim on the difference. Almost every article about this says "claim back the difference", and that is not what happens.
The shortfall is an allowable expense. Tax relief on an expense means your marginal rate applied to it, not the expense handed to you. So:
- Ten thousand business miles, paid by your employer at 25p a mile.
- The approved amount is £5,500. Your employer pays £2,500.
- So the shortfall is £3,000.
- A basic rate taxpayer receives £600 of that. A higher rate taxpayer receives £1,200.
That is still £600, and a lot of people never claim it at all. But going in expecting £3,000 and receiving £600 is how the claim gets abandoned halfway through, and it is entirely avoidable by knowing the number first.
Where to claim it, and how far back
Through your Self Assessment return if you file one. If you do not, use form P87, which covers expense claims under £2,500 in the year; above that HMRC wants a return instead.
You can go back four tax years. If you have been underpaid mileage for a while, the earlier years are usually still open, and at the old 45p rate the shortfall against a low employer rate was smaller but far from nothing.
The threshold halves your rate, and the blended figure is the one that matters
Above 10,000 business miles the rate drops from 55p to 25p. That is a fall of more than half, and it arrives without warning partway through the year.
So somebody doing 20,000 business miles is not on 55p. They are on 10,000 at 55p and 10,000 at 25p, which is an effective 40p a mile across the year. When you are judging whether an employer's mileage policy is fair, that blended figure is the honest comparison rather than the headline rate.
The threshold is per tax year and resets every April. Motorcycles and bicycles have no threshold at all: those rates are flat however many miles you do.
If your employer pays more than the approved rate
This runs the other way and is rarely mentioned. Anything above the approved rate is taxable earnings, not a tax-free allowance. It should be going through payroll or onto a P11D, and there is nothing for you to claim.
The usual way people find out is a tax code change they were not expecting. A generous mileage rate is a perfectly reasonable thing for an employer to offer; it is just not tax free above 55p.
What counts as a business mile, which is where the under-claiming happens
Ordinary commuting never counts. Home to your permanent workplace is not business mileage however far it is, and no arrangement with your employer changes that.
But two things do count and get missed. A journey to a temporary workplace is business mileage. And travel between two workplaces on the same day is business mileage, which is the one people forget entirely because it does not feel like a trip.
It is not a fuel rate, and it is not the company car rate
The approved rate covers everything: fuel, insurance, servicing, tyres, road tax and depreciation. That is why 55p can look generous against what the petrol cost, and why treating it as a fuel reimbursement understates what you are being compensated for.
A completely separate set of Advisory Fuel Rates exists for company cars, where the employer owns the vehicle and the driver is only being reimbursed for fuel. Those are much lower and they are not interchangeable with these. Mixing the two is the second most common mistake on this subject after the relief one.
One last note on the arithmetic here. The marginal rates built into the tool are the rest of the UK. Scottish income tax bands differ, and they were not verified for this page, so a Scottish taxpayer should type their own rate into the box. Everything else works identically; only the percentage changes.
Common questions
Is the mileage rate 45p or 55p?
It is 55p for the first 10,000 business miles, from 6 April 2026. It was 45p before that, and 45p is what most of the internet still says, because it had not changed since 2011 and GOV.UK did not update its own rates page until 21 May 2026. The rate above 10,000 miles is unchanged at 25p.
My employer pays less than the approved rate. Do I get the difference back?
No. This is widely misunderstood: you get tax relief on the difference, which means your marginal rate applied to it. On 10,000 miles paid at 25p against the 55p approved rate the shortfall is £3,000, and a basic rate taxpayer receives £600 of it. Every headline about claiming back the difference is quoting the £3,000.
How do I actually claim it?
Through your Self Assessment return if you file one. If you do not, use form P87, which covers expenses under £2,500 in the year. Above that HMRC wants a return. You can go back four tax years, so an underpaid claim from an earlier year is usually still live and worth checking.
What happens if my employer pays more than 55p?
The excess is taxable earnings rather than a tax-free allowance. It should be going through payroll or onto a P11D, and there is nothing to claim. An unexpected tax code change is usually how this turns up, because the tax gets collected either way.
Does the 10,000 mile threshold reset?
It is per tax year, so it resets every April. Once you cross it the rate more than halves, from 55p to 25p, which means somebody doing 20,000 business miles has an effective rate of 40p across the year rather than 55p. That blended figure is the one to hold an employer policy against.
Does commuting count as business mileage?
No. Home to your permanent workplace never counts, however far it is. A journey to a temporary workplace does count, and so does travel between two workplaces on the same day. That second one is where people under-claim rather than over-claim.
What about passengers?
An employer may pay 5p per business passenger per mile tax free, on top of your own mileage, and it does not count towards your 10,000 mile threshold. Most employers do not pay it. Whether relief can be claimed where the employer pays nothing was not something we could confirm at source, so this tool shows the figure as something to raise with them rather than counting it as money you can get back.