Business mileage

Conditions

• From 6 April 2026 (tax year 2026-27), the approved mileage rate for cars and vans rose to 55p per mile for the first 10,000 business miles in the tax year, up from 45p — the first increase since 2011/12. The rate above 10,000 miles remains 25p per mile. Motorcycles: 24p per mile. Bicycles: 20p per mile. Passenger rate: 5p per passenger per business mile carried. Source: GOV.UK travel mileage and fuel rates, updated 21 May 2026 (verified 2026-06-18).
• The same 55p / 25p rates apply to both employees claiming Approved Mileage Allowance Payment (AMAP) relief and sole traders or partnerships using the simplified mileage method for business vehicles. Limited companies reimburse directors and employees at these rates but do not use the simplified mileage method — they claim the actual vehicle costs through the company.
• Only genuine business journeys qualify. Ordinary commuting from home to a permanent workplace does not.
• If you use the mileage method, you cannot also claim separately for fuel, servicing, insurance or other running costs of the same vehicle.
• Employees can claim tax relief on the shortfall if their employer reimburses them below the approved rate.

Common mistakes

• Claiming for commuting to a regular place of work.
• Mixing the mileage method with actual vehicle running costs for the same car.
• Not keeping a contemporaneous mileage log, which makes claims hard to defend.

What to keep

• A mileage log with date, journey purpose, start and end points, and miles travelled.
• Records of any reimbursement received from an employer.

Real-world example

A consultant drives 8,000 business miles in the year visiting clients. They claim those miles at the higher approved rate, keeping a simple spreadsheet log of each trip as evidence.

Frequently asked

Related allowances