---
title: "HMRC Mileage Expenses 2026/27: The 55p Per Mile Rate Explained"
description: "Businesses, employees, and the self-employed frequently use personal vehicles for work-related travel. Understanding how to claim mileage expenses correctly is essential for tax compliance and efficiency. For the 2026/27 tax year, HMRC has set updated Approved Mileage Allowance Payments (AMAPs),…"
url: "https://www.accountingfirms.co.uk/knowledge-bank/hmrc-mileage-expenses/"
updated: "2026-08-12"
category: Self Employed Tax
---

# HMRC Mileage Expenses 2026/27: The 55p Per Mile Rate Explained

Businesses, employees, and the self-employed frequently use personal vehicles for work-related travel. Understanding how to claim mileage expenses correctly is essential for tax compliance and efficiency. For the 2026/27 tax year, HMRC has set updated Approved Mileage Allowance Payments (AMAPs), which provide a simplified, tax-free way to handle these costs.

## **What are the 2026/27 Approved Mileage Rates?**

HMRC sets standard rates that can be paid tax-free to employees or claimed as a business expense by the self-employed. These rates are designed to cover the total cost of owning and running a vehicle, including fuel, depreciation, insurance, and maintenance.

The approved mileage rates for the tax year starting 6 April 2026 are as follows.

| Vehicle Type | Rate for first 10,000 business miles | Rate for each subsequent mile |
| --- | --- | --- |
| Cars and Vans | 55p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |

This represents an increase for cars and vans from the previous 45p rate for the first 10,000 miles, reflecting changes in motoring costs.

The legislative basis for these rates is found in the [Income Tax](https://www.accountingfirms.co.uk/blog/role-of-accounting-in-crowdfunding-campaigns/) (Earnings and Pensions) Act 2003, which allows the Treasury to amend the rates by regulation.

## **Who Can Claim Mileage Expenses?**

Several groups can use the approved mileage rates to account for business travel.

- **Employees:** If you use your own vehicle for business travel, your employer can pay you a mileage allowance up to the approved rate, tax-free.
- **Self-Employed (Sole Traders and Partnerships):** You can use the simplified expenses [scheme to claim a flat rate](https://www.accountingfirms.co.uk/blog/what-are-the-types-of-self-employed/) for your business mileage instead of calculating the actual costs of buying and running your vehicle. This is an alternative to claiming capital allowances.
- **Unincorporated Property Businesses:** Landlords carrying on a property business as individuals or in a partnership can also use the fixed-rate mileage deduction, simplifying their tax computations.

## **How to Claim Mileage Expenses: A Practical Breakdown**

The method for claiming mileage expenses depends on your employment status.

### **For Employees**

Your employer can make Mileage Allowance Payments (MAPs) for your business travel. So long as the total paid in a tax year does not exceed the "approved amount" (miles travelled multiplied by the relevant rate), the payments are not liable for [income tax](https://www.accountingfirms.co.uk/blog/hmrc-payment-niers/).

If your employer pays less than the approved rate, or pays nothing at all, you can claim [tax relief](https://www.accountingfirms.co.uk/blog/have-my-pension-fund/) on the shortfall. This is known as [Mileage Allowance Relief](https://www.accountingfirms.co.uk/blog/how-many-miles/) (MAR). You claim this relief against your earnings for the tax year.

### **For the Self-Employed and Landlords**

As a sole trader, partner, or landlord, you can use the approved mileage rates to calculate your vehicle expenses as a business deduction. This simplified method means you calculate your total business miles for the year and multiply that by the relevant flat rate.

This method is optional; the alternative is to claim the business proportion of your actual motoring costs (fuel, servicing, insurance) and claim capital allowances for the vehicle's purchase price. However, if you have ever claimed capital allowances for a vehicle, you cannot use the flat mileage rate for that same vehicle.

## **What Do the Mileage Rates Cover?**

The approved mileage rates are intended to be comprehensive. They cover:

- Fuel and oil
- Servicing and repairs
- Insurance and Vehicle Excise Duty
- MOT tests
- Depreciation of the vehicle.

Costs that are specific to a particular journey are not covered by the rate and can be claimed separately. These include:

- Tolls
- Congestion charges
- Parking fees.

These incidental expenses are deductible provided they are incurred wholly and exclusively for business purposes.

## **Passenger Payments**

An additional tax-free [allowance is available](https://www.accountingfirms.co.uk/blog/tax-planning-for-clearing-overdrawn-directors-loan-accounts/) for carrying fellow employees on a business journey. You can receive an extra 5p per mile for each passenger, provided the journey is also a business journey for them.

## **Essential Record-Keeping for Mileage Claims**

HMRC requires you to keep accurate and contemporaneous records to support any claim for mileage expenses. Failure to do so can lead to penalties. Your mileage log should contain, for each business journey:

- The date of the journey.
- The starting point and destination.
- The purpose of the journey.
- The number of miles travelled.

Employers must also maintain records of all mileage allowance payments made. For VAT purposes, detailed [mileage records](https://www.accountingfirms.co.uk/blog/reclaiming-vat-on-motoring-expenses/) separating business and private use are crucial if you intend to reclaim input tax on fuel.

## **VAT on Mileage Expenses**

If you are VAT registered, you can reclaim the VAT on the fuel element of the mileage allowance paid to employees for business travel. To do this, you must retain VAT invoices for the fuel purchased. The amount of input tax you can claim is calculated by multiplying the fuel element of the allowance by the VAT fraction (VAT rate ÷ (100 + VAT rate)).

 

*To further advise on this matter, it would be beneficial to review the specific terms of any employment contract regarding expense reimbursement or, for self-employed individuals, to analyse past accounts to determine whether claiming actual costs or simplified expenses is more advantageous. You should refer to HMRC’s Business Income Manual at BIM75005 for detailed guidance on [simplified expenses and VAT](https://www.accountingfirms.co.uk/blog/tax-deductions-for-businesses-is-the-remuneration-excessive/) Notice 700/64 for motoring expenses.*

## References

1. [Business Income Manual - BIM75005 - Simplified expenses: expenditure on motor vehicles at 1](https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim75005#:~:text=exclusively%20for%20business%20purposes,the%20cash%20basis%20rules%2C%20a&text=exclusively%20for%20business%20purposes,%20Under&text=is%20not%20available,the%20cash%20basis%20rules%2C%20a&text=is%20not%20available,%20Under)