Everything UK businesses, sole traders, and employees need to know about claiming business mileage — from the new 55p car rate to record-keeping rules.
| Point | What It Means |
|---|---|
| Cars and Vans | 55p per mile for the first 10,000 business miles, then 25p per mile after that. |
| Motor Cycles | 24p per mile for every business mile. |
| Bicycles | 20p per mile for every business mile. |
| Previous Rate | Cars and vans were 45p for the first 10,000 miles before 6 April 2026. |
| Self-Employed Use | You can use simplified expenses for vehicles if you meet the rules. |
Approved mileage rates are HMRC-set rates that allow you to claim tax-free or deduct business mileage without calculating the full actual cost of each journey. They are commonly used by employers, directors, sole traders, and self-employed people who drive their own vehicle for business travel.
HMRC publishes the approved mileage rates for the 2026 to 2027 tax year as follows: cars and vans 55p for the first 10,000 business miles and 25p after that, motor cycles 24p, and bicycles 20p. HMRC's internal manual also confirms that, before 6 April 2026, cars and vans were 45p for the first 10,000 miles and 25p after that, while motor cycles and bicycles remained unchanged.
Expert Insight
In over 15 years of practice, I've seen countless small business owners overcomplicate mileage claims by trying to track every fuel receipt and service invoice. The beauty of approved mileage rates is that HMRC has already done the heavy lifting — the rate covers fuel, wear and tear, insurance, servicing, and depreciation. Unless you have unusually high running costs, the flat rate is almost always the better option.
These rates apply to the relevant business mileage claims made from 6 April 2026 . The rate you use depends on the tax year and whether you are an employee, employer, or self-employed person using the simplified expenses rules.
| Vehicle Type | First 10,000 Business Miles | Each Mile Over 10,000 |
|---|---|---|
| Cars and Vans | 55p | 25p |
| Motor Cycles | 24p | 24p |
| Bicycles | 20p | 20p |
These are HMRC's approved mileage rates for 2026/2027.
| Vehicle Type | First 10,000 Business Miles | Each Mile Over 10,000 |
|---|---|---|
| Cars and Vans | 45p | 25p |
| Motor Cycles | 24p | 24p |
| Bicycles | 20p | 20p |
HMRC's manual shows this older rate structure as applying from 2011/2012 to 2025/2026, with the car and van rate increasing from 6 April 2026.
The rates are used where you are claiming for business journeys in your own vehicle. They are commonly used by employees reclaiming mileage, by employers paying Approved Mileage Allowance Payments (AMAPs), and by self-employed people using simplified expenses.
HMRC says payments up to the approved amount can be made tax-free. If an employer pays less, you may claim tax relief on the shortfall. If they pay more, the excess can be taxable.
Employers can pay AMAPs up to the approved rates without reporting to HMRC. Anything above the approved rate must be reported on form P11D or through payroll.
HMRC's simplified expenses rules let you claim mileage at the flat rates instead of working out actual running costs, provided you haven't already claimed capital allowances for the vehicle.
Pro Tip
If you're a director of your own limited company and use your personal car for business, you can claim mileage from the company at the approved rates. But here's what many miss: once you've used the mileage basis for a vehicle, you must stick with it for that vehicle's entire life within the business. You can't switch between actual costs and mileage rates year to year for the same car. Choose carefully at the outset. Learn more about how our limited company accountants can help you structure director expenses correctly.
If you use a car or van for business travel, the first 10,000 business miles in the tax year are paid at 55p per mile from 6 April 2026. After you pass that point, the rate drops to 25p per mile. The threshold is calculated across the tax year, and HMRC says the mileage for a year is worked out together even if more than one vehicle is used.
For motor cycles and bicycles, the rate does not change after 10,000 miles because the same rate applies to every business mile. That makes the calculation simpler for riders and cyclists who use their own vehicle for work journeys.
Example 1
8,000 business miles in a car
Claim 55p × 8,000 = £4,400
Under the 10,000 threshold, so the full 55p rate applies.
Example 2
12,000 business miles in a car
Claim
55p × 10,000 = £5,500
+
25p × 2,000 = £500
=
£6,000 total
Example 3
Motorcycle or bicycle
Claim the same rate per mile regardless of total mileage — 24p (motor cycle) or 20p (bicycle) for every business mile.
HMRC mileage rates are meant to give a simple, standardised way to cover the costs of business travel. That includes fuel, maintenance, insurance, servicing, and depreciation, without needing to itemise every single expense.
The main advantage is simplicity. You keep a log of business miles and apply the rate. That is much easier than producing every fuel receipt and repair invoice, especially for small businesses and sole traders who travel regularly. Our online accountants for sole traders can help you set up a simple mileage tracking system that keeps HMRC happy.
You should keep a mileage log showing the date, journey, business purpose, and miles travelled. HMRC may ask you to support the claim, so clear records are important.
A proper mileage log isn't complicated, but it must be consistent. If HMRC opens a compliance check — and they do, especially for claims exceeding 10,000 miles — your log is the first thing they'll ask for. I've seen claims disallowed not because the mileage wasn't genuine, but because the records were too vague to satisfy the officer.
If you are an employee claiming tax relief or an employer paying mileage, good records also help you prove that the mileage relates to genuine business travel. HMRC provides detailed guidance on record-keeping requirements at GOV.UK business travel mileage rules .
Approved mileage rates are one of the easiest ways to keep business travel claims simple and HMRC-compliant. For the 2026/2027 tax year, the main change is the higher rate for cars and vans, moving to 55p for the first 10,000 business miles. If you keep clean mileage records and apply the right rate, the calculation is straightforward and efficient.
The increase from 45p to 55p is significant — it's the first rise in the car and van rate in over a decade. For a business owner driving 10,000 miles, that's an extra £1,000 tax-free compared to the previous rate. It's worth checking your mileage records now to ensure you're not leaving money on the table. Speak to our small business accountants to review your expenses and make sure you're claiming everything you're entitled to.
At Taxwise Accountancy, we help startups, sole traders, and growing businesses across the UK manage their expenses, tax returns, and HMRC compliance. Whether you need a second opinion on your mileage logs or want to switch to simplified expenses, we're here to help.
Speak to an AccountantInformation correct as of 6 April 2026. This article is for general guidance only and does not constitute financial or tax advice. Always consult a qualified professional for your specific circumstances.