HMRC Mileage Rates 2026/27: A Complete Guide

HMRC mileage allowance rates for 2026/27 are unchanged: 45p per mile for the first 10,000 business miles, 25p thereafter. Here’s everything you need to know about applying them correctly.

What are HMRC mileage allowance payments? 

Mileage Allowance Payments (MAPs) are the amounts you can pay employees, tax-free, when they use their own vehicles for business travel. Rather than reimbursing individual costs like fuel, insurance, or wear and tear separately, HMRC sets a flat pence-per-mile rate that covers it all in one go. 

These are also known as Approved Mileage Allowance Payments (AMAPs). As long as you pay at or below the approved rate, there’s nothing to report to HMRC and nothing to tax. Simple, in principle. 

Why this matters for you 

A lot of organisations don’t realise that underpaying employees—say, reimbursing at 30p per mile rather than the approved 45p—means employees can claim the shortfall back themselves through Mileage Allowance Relief (MAR). That’s an admin burden you’re quietly pushing onto your finance team, all for the sake of a few pence. 

Overpaying, on the other hand? Any amount above the approved rate is treated as a taxable benefit, meaning that it needs to go on a P11D form (or through payroll), and attracts National Insurance contributions. So, it’s worth getting this right. 

What are the HMRC mileage rates for 2026/27?

Good news: the approved mileage allowance rates haven’t changed for 2026/27. They’ve actually been frozen at the same level since April 2011—over 15 years. While that’s a point of growing frustration (more on that below), it does at least mean there’s nothing new to update in your systems this year. 

Here are the current rates from 6 April 2026 to 5 April 2027: 

Type of vehicle	First 10,000 miles	Over 10,000 miles
Cars and vans	45p per mile	25p per mile
Motorcycles	24p per mile	24p per mile
Bicycles	20p per mile	20p per mile

The two-tier AMAP structure means the rate drops from 45p to 25p per mile once an employee crosses 10,000 cumulative business miles in a tax year.

One quick note: if an employee carries a work colleague in their own vehicle, they can also claim an extra 5p per mile per passenger on top of the standard rate. That’s worth flagging to any employees who regularly car-share for client visits or site travel. 

How to calculate mileage reimbursement 

It’s straightforward. Multiply the miles driven by the relevant rate, applying the two-tier structure for cars and vans once the 10,000-mile threshold is crossed. 

For example: an employee drives 14,000 business miles in their own car over the year. Their reimbursement would be: 

• First 10,000 miles: 10,000 × 45p = £4,500 
• Next 4,000 miles: 4,000 × 25p = £1,000 
• Total: £5,500 

This works well when employees drive a moderate amount. But be aware that for high-mileage employees—those covering hundreds of miles a week—the 25p rate after 10,000 miles may not cover their actual running costs, particularly with fuel prices currently elevated. It’s worth having a conversation about whether your internal policy needs to reflect this. 

 

A closer look at each vehicle type 

Cars and vans 

The approved rate for cars and vans is 45p per mile for the first 10,000 business miles, then 25p per mile for everything after that. This applies regardless of the engine size, fuel type, or age of the vehicle. 

Importantly, this includes hybrid cars, too. They follow the same 45p/25p structure as petrol and diesel vehicles. So, whether your employee drives a Toyota Prius or a Ford Focus, the rate is the same. 

What about electric vehicles? For employees using their own electric cars for business, the standard AMAP rate of 45p/25p still applies—there’s no separate rate for personally-owned EVs. This is one area where HMRC’s rates are under some scrutiny, since the running costs of EVs are quite different from petrol or diesel vehicles. For now, though, the same rates apply. 

Motorcycles 

Employees using their own motorcycles for business can claim 24p per mile. Unlike cars and vans, there’s no two-tier system. The 24p rate applies regardless of how many miles are driven. There’s no 10,000-mile threshold to manage. 

For example, if an employee travels 6,000 business miles on their motorcycle, that’s 6,000 × 24p = £1,440 in tax-free reimbursement. 

Bicycles 

Yes, cycling for work counts too. The approved rate is 20p per mile, with no mileage limit. It covers things like maintenance, insurance, and general wear and tear. It might sound small, but for employees who regularly cycle between sites or to client meetings, it adds up—and it’s a great incentive to encourage greener travel habits across your organisation. 

 

What journeys count as business mileage? 

This is where a lot of organisations—and employees—get caught out. Not every work-related journey qualifies for mileage reimbursement. 

Journeys that do qualify: 

• Travelling from one office location to another 
• Visiting a client, customer, or supplier at their premises 
• Travelling to a temporary workplace (a location where an employee works for 24 months or less) 
• Attending a conference, training event, or business meeting away from the usual workplace 

Journeys that don’t qualify: 

• The daily commute from home to a permanent, regular place of work 
• Any travel for private purposes, even if the employee takes a work call on the way 
• Travelling to a location that’s very close to the regular workplace and is effectively still the regular workplace 

Commute errors are a common mistake, and one that HMRC takes seriously. The key distinction is “temporary workplace” versus “permanent workplace”—and HMRC has detailed guidance on this. 

What are the company car and van benefit charges for 2026/27?

If your organisation provides company cars or vans, different rules apply. Employees using a company vehicle don’t qualify for the AMAP rates above—instead, you’ll be working with Advisory Fuel Rates (AFRs) and benefit-in-kind charges. 

Here’s what’s changed for 2026/27, as confirmed in the Autumn Budget 2025 and on GOV.UK: 

Charge	2025/26	2026/27	Increase
Van benefit charge	£4,020	£4,170	+£150
Van fuel benefit charge	£769	£798	+£29
Car fuel benefit multiplier	£28,200	£29,200	+£1,000

These increases are in line with inflation (based on the September 2025 Consumer Price Index figure). It’s worth updating your payroll system to reflect the new figures before the start of the tax year—see our guide to company car and fuel benefit rates for more detail on how these charges are calculated. 

Zero-emission vans still attract a nil rate of tax under the van benefit charge—so if your fleet includes any fully electric vans, those employees won’t face a taxable benefit. 

 

What are the HMRC advisory fuel rates for 2026/27?

Advisory Fuel Rates (AFRs) are separate from the AMAP rates and apply specifically to company-owned vehicles. They’re used for two purposes: 

1. Reimbursing employees for business travel in a company car 
2. Calculating repayments when employees use the company car for personal travel and need to pay their employer back for the fuel 

HMRC reviews these rates quarterly—usually on 1 March, 1 June, 1 September, and 1 December. Employers can use the previous rates for up to one month after a new set comes into effect, so you do get a short transition window. 

Here are the rates effective from 1 March 2026: 

Petrol 

Engine size	Advisory fuel rate
Up to 1,400cc	12p per mile
1,401cc to 2,000cc	14p per mile
Over 2,000cc	22p per mile

Diesel 

Engine size	Advisory fuel rate
Up to 1,600cc	12p per mile
1,601cc to 2,000cc	13p per mile
Over 2,000cc	18p per mile

LPG (Liquefied Petroleum Gas) 

(Rates reduced from previous quarter from 1 March 2026) 

Engine size	Advisory fuel rate
Up to 1,400cc	10p per mile
1,401cc to 2,000cc	12p per mile
Over 2,000cc	19p per mile

Electric vehicles 

HMRC now splits the Advisory Electric Rate (AER) by charging type: 

Charging type	Rate
Home charging	7p per mile
Public charging	15p per mile

The public charging rate increased from 14p to 15p in the March 2026 update, reflecting higher public charging costs. If employees charge their company EVs across both home and public chargers, you’ll need to apportion the mileage accordingly. For VAT purposes, electricity isn’t treated as a fuel for car fuel benefit charges—so fully electric company cars don’t attract the car fuel benefit charge at all. 

Hybrid vehicles are treated as either petrol or diesel for AFR purposes, depending on their engine type. 

 

The AMAP rate debate: what’s happening? 

It’s worth flagging something that’s generated a lot of discussion in early 2026. The 45p AMAP rate has been frozen since April 2011—and with vehicle running costs having risen significantly since then, there’s growing pressure on the government to increase it. 

In March 2026, MPs debated the issue in the House of Commons following a petition with over 41,500 signatures, with campaigners pointing out that the true cost of running a vehicle is estimated at around 67p per mile—well above the current 45p rate. The Chancellor acknowledged that motoring costs have changed significantly and indicated the government would consider the matter at a future fiscal event. 

So while there’s no change for 2026/27, it’s worth keeping an eye on any announcements in the next Budget. If a rate increase is confirmed, it would most likely take effect from April 2027. 

 

Common pitfalls to watch out for 

Even organisations with good intentions run into issues with mileage. Here are the most common ones to keep on your radar: 

• Using the wrong rate for company cars vs personal vehicles. AMAP rates are for employees’ own vehicles. Advisory Fuel Rates are for company cars. Using the wrong set is one of the most common findings during an HMRC Employer Compliance review. 
• Not tracking cumulative mileage across the year. The 10,000-mile threshold applies across the full tax year, not per trip or per month. If you’re handling this manually, it’s easy to lose track—and overpay at 45p when you should have dropped to 25p. 
• Accepting commuting claims. Home-to-office travel isn’t eligible, even if the employee also takes a work call during the journey. Make sure your expenses policy is clear on this. 
• Not keeping adequate records. HMRC can ask to see mileage logs going back several years. Each entry should include the date, start and end point, business purpose, and distance. A log made at the time of the journey carries much more weight than one reconstructed from memory. 
• Paying above the approved rate without reporting it. If your organisation pays more than 45p per mile, the excess is taxable. It needs to be reported via P11D or through payroll, and Class 1A National Insurance contributions apply. 

If you’re still relying on spreadsheets or paper forms, it might be time to reconsider. Our guide to how mileage reimbursement works covers the process end-to-end. 

 

Reporting mileage to HMRC 

For most organisations, mileage payments within the approved rates don’t need to be reported at all. But there are situations where reporting is required: 

• If an employee drives more than 10,000 business miles in a year, any payment above 25p per mile for those excess miles must be reported on a P11D form (or payrolled as a benefit). 
• If you pay above the approved rate at any point, the excess is a taxable benefit and needs to be reported accordingly. 
• Employees who receive less than the approved rate can claim Mileage Allowance Relief (MAR) from HMRC directly. If they don’t file a Self Assessment return, they can use form P87—though note that since October 2024, most P87 claims must be submitted by post rather than online. 

You can read more about the P11D reporting process and payrolling benefits in kind in our payroll compliance resources at Cintra. 

 

Make mileage tracking easier for your organisation 

Tracking mileage manually—across multiple employees, multiple vehicle types, and a 10,000-mile cumulative threshold—can get complicated quickly. The risk of errors, missed thresholds, or inadequate records is real, and the consequences of getting it wrong (whether that’s a tax charge or a failed HMRC compliance check) aren’t worth it. 

Capture Expense automatically calculates mileage based on journey data and HMRC-approved rates. It tracks cumulative mileage across the year, switches rates automatically at the 10,000-mile threshold, supports multiple vehicle types, and keeps a clean audit trail of every claim—ready if HMRC ever asks to see it. 

You can also track carbon emissions alongside mileage, which is increasingly useful for organisations with sustainability reporting requirements. Find out more about tracking CO2 and mileage data together. And if your teams are managing broader expense policies alongside mileage, our expense compliance guide covers everything in one place.