HMRC approved mileage rates 2026/27

For the first time since 2011, the rate for cars has gone up. From the 2026 to 2027 tax year, HMRC's approved mileage rate for cars and vans is 55p per business mile for the first 10,000 miles, and 25p after that. Here is the full table, how the 10,000 miles are counted, two worked examples and what you can do if your employer pays less.

Updated October 2026

The rates

These are the rates in HMRC's table Travel – mileage and fuel rates and allowances (updated 21 May 2026), per business mile:

On top of that, an employer can pay 5p per passenger per business mile for carrying fellow employees in a car or van. HMRC's table adds that there is no relief if you receive less than 5p or nothing at all.

The UK tax year runs from 6 April to 5 April, so the new rate applies to business miles from 6 April 2026. GOV.UK's pages for employees say the first-10,000-mile rate was 45p before that date. A journey on 5 April 2026 still belongs to the 2025 to 2026 tax year.

Who the rates are for

• Employees using their own vehicle. The approved rate is what your employer can pay without reporting it to HMRC. It is meant to cover the cost of owning and running the vehicle, so fuel, vehicle tax, MOTs and repairs can't be claimed on top.
• The self-employed using simplified expenses. The flat rates per mile for cars and goods vehicles are the same: 55p for the first 10,000 miles in 2026 to 2027 (45p before 6 April 2026), then 25p, and 24p for motorcycles. Parking and other travel, such as train journeys, can be claimed on top.

The rates are not for company cars. A company car driver can claim relief on fuel or electricity paid for business trips instead, with records of the actual cost.

How the 10,000 miles are counted

The threshold is per tax year and starts again on 6 April. HMRC's employer guidance, Expenses and benefits: business travel mileage, says it does not matter if an employee uses more than one vehicle in a year – it is all calculated together. So the business miles in two of your own cars count towards the same 10,000.

Worked example: the approved amount

You drive 12,000 business miles in your own car in the 2026 to 2027 tax year:

• 10,000 miles × 55p = £5,500
• 2,000 miles × 25p = £500
• Approved amount: £6,000

For comparison, GOV.UK's own example at the old rate gives £5,000 for the same 12,000 miles (10,000 × 45p plus 2,000 × 25p).

If your employer pays less: Mileage Allowance Relief

Employers don't have to pay the approved rate. If they pay less, GOV.UK says the employee can claim tax relief on the unused balance, called Mileage Allowance Relief. If they pay more, the extra is taxable.

Worked example: you drive 8,000 business miles in 2026 to 2027 and your employer pays 40p a mile.

• Approved amount: 8,000 × 55p = £4,400
• Paid by your employer: 8,000 × 40p = £3,200
• Unused balance: £1,200

The relief is not £1,200 in cash. GOV.UK explains that you get tax relief based on the rate at which you pay tax: at 20%, relief on £1,200 is worth £240. You claim through GOV.UK's online service, or in your Self Assessment tax return if you send one, and you can claim for the current tax year and the four before it. With a claim, GOV.UK asks for copies of your mileage logs, with the reason for every journey and the start and end postcodes – see What HMRC needs in a business mileage log.

How Körlogg helps

Körlogg logs your trips in miles as you drive and applies HMRC's approved rates for your own car: 55p for the first 10,000 business miles of the tax year, then 25p, and 45p for miles before 6 April 2026. The 10,000 miles count the business miles of all your own cars, start again on 6 April, and a trip that crosses the threshold is split between the two rates. Company cars earn no amount. With Körlogg Pro you see the approved amount in the report and export the log as PDF or Excel, with the calculation and your trips. Körlogg does not calculate motorcycle, bicycle or passenger rates. Körlogg has no affiliation with HMRC. Körlogg on the App Store