Small Business Accountants

HMRC Mileage Rates and Allowance - How to Claim

HMRC sets approved mileage allowance payments (AMAPs) for business travel in personal vehicles: 45p per mile for the first 10,000 car or van miles, then 25p per mile thereafter. Motorcycles qualify at 24p and bicycles at 20p for all business miles. Employees can claim tax relief via Form P87 or Self Assessment if their employer pays below these rates, whilst self-employed individuals deduct mileage as a business expense.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 15

Key takeaways

HMRC approved mileage rates for 2025/26 are 45p per mile for the first 10,000 business miles in a car or van, dropping to 25p per mile thereafter.
Commuting between home and a regular workplace does not qualify as business mileage, but travel to a temporary workplace expected to last under 24 months does.
Employees whose employer pays below the HMRC rate can claim the shortfall as tax relief through Form P87 (under £2,500) or a Self Assessment return.
Self-employed individuals must choose between HMRC flat-rate mileage and actual vehicle costs for each vehicle, and cannot switch methods once selected.
Motorcycles qualify at 24p per mile and bicycles at 20p per mile for all business miles, with an additional 5p per mile claimable for each passenger carried on a business journey.

Claiming Business Mileage Allowance

If you use your own vehicle for work, the HMRC mileage rates and allowances can really help you get some money back for your business travel. These rates are set by HMRC to help cover costs like fuel, wear and tear, and other expenses related to your vehicle. These rates help work out how much you can claim tax-free if you use your car, van, motorbike, or even a bicycle for business related travel. Instead of keeping track of every little expense, you can just multiply your business miles by HMRC’s fixed rates to figure out what you can claim.

This can lead to some nice tax savings. Whether you’re self-employed, a company director, or an employee using your personal car for work trips, you might be eligible for tax relief or even tax-free mileage payments from your employer or business.

A lot of people miss out on this benefit simply because they don’t fully understand how it works. That’s why it’s crucial to be aware of the current mileage rates and how to use them effectively.

For the 2025/26 tax year, HMRC has mostly kept the mileage rates the same. This guide will walk you through everything you need to know about the latest HMRC mileage rates and how to make the most of them.

What is Mileage Allowance?

Mileage allowance refers to the amount you can claim when you use your personal vehicle for business purposes. It’s designed to help cover expenses like fuel, insurance, repairs, and the general wear and tear that comes with driving. Instead of tracking every single cost, HMRC lets you claim these expenses using standard approved mileage rates.

The official term for this is Approved Mileage Allowance Payments (AMAPs). These are the fixed amounts per mile that HMRC allows you to claim without having to pay tax on them. Rather than claiming separately for fuel, maintenance, insurance, and other running costs, you can simply use HMRC’s mileage claim rates. For instance, if you drive your car for work, you can claim 45p per mile for the first 10,000 miles in a tax year, and 25p for any miles beyond that.

Difference Between Mileage Rate and Mileage Allowance

The mileage rate is the fixed amount HMRC sets for each mile you travel for business. For example, if you’re driving a car, the rate could be 45p per mile for the first 10,000 miles in a tax year.

On the other hand, the mileage allowance is the total amount you can claim based on the number of business miles you drive. So, if you drive 5,000 business miles in a year, your allowance would be 5,000 x 45p = £2,250.

Why Does It Matter?

HM Revenue and Customs mileage rates are helpful because they allow people to reclaim part of their travel costs without incurring extra tax. If your employer pays you less than the HMRC rate, or doesn’t reimburse you at all, you can claim tax relief on the difference through your Self Assessment tax return or a P87 form.

What Vehicles Are Covered?

HMRC mileage rates apply to various personal vehicles used for work, including:

Each vehicle type has its own rate per mile, designed to cover typical running costs associated with business travel. Just a heads up: commuting between your home and your regular workplace doesn’t count, you can only claim for journeys that are business-related.

Both self employed and employees can claim business mileage.

HMRC Approved Mileage Rates for 2025/26

Every tax year, HMRC sets fixed mileage rates for business travel in your own vehicle. These rates help you work out how much you can claim without needing to keep receipts for fuel, insurance, or repairs. You can use these rates to claim expenses if you're self-employed or to ask your employer for mileage payments if you're an employee using your personal vehicle for work. For the 2025/26 tax year, the rates remain the same as the previous year, making it easier for people to plan and claim.

How to Calculate Mileage Allowance

To calculate your mileage claim, simply multiply your business miles by the HMRC mileage rate for your type of vehicle. Below is a simple step-by-step guide to help you figure out your mileage allowance.

Step 1: Track all your business journeys. Write down the date, purpose, start and end points, and the number of miles.

Step 2: Add up the total number of business miles you’ve driven during the tax year. Only count journeys that are work-related — not personal or commuting to your usual workplace.

There are two approaches you can take:

1. Add up all your motor expenses for the year. Calculate the number of business miles as a percentage of your total miles. This percentage can be used to work out the business percentage of your costs.

2. Claim a fixed rate mileage allowance. The costs of purchase and upkeep are included in the rate.

For small businesses, the second approach is a simpler option - there are fewer calculations involved, and you don't need to work out your total motor expenses across the year.

However, there are a few points you need to take note of:

Once you have decided on a method, you need to stick with it until the vehicle is replaced
If your business' annual turnover exceeds the VAT threshold (set at £90,000 for 2025), you need to use the first method
You can't use the second method if you bought your vehicle with a capital allowance

Step 3: Apply the correct HMRC mileage rate based on your vehicle type and how many miles you’ve driven.

Step 4: Multiply total business miles with HMRC rate per mile

Example for an Employee Using a Car

Let’s say you’re employed and have used your personal car for 12,000 miles of business travel in the 2025/26 tax year.

First 10,000 miles: 10,000 × 45p = £4,500
Remaining 2,000 miles: 2,000 × 25p = £500
Total claimable amount: £4,500 + £500 = £5,000

If your employer pays less than this, you can claim the difference as tax relief through HMRC using Form P87 or via Self Assessment if you already file a tax return.

Example for a Self-Employed Person Using a Motorcycle

If you're self-employed and used your motorbike for 3,000 business miles:

3,000 × 24p = £720 You can include this amount as an allowable expense when filling in your Self Assessment return.

Want to know how much you can claim for business travel in the 2025/26 tax year? Use our free Mileage Claim Calculator to get an instant estimate based on the number of business miles you’ve driven and the type of vehicle you use. Whether you’re self-employed, a company director, or an employee using your own car for work, this tool makes it quick and simple to work out your potential allowance.

Mileage Allowance for the Self-Employed

As a self-employed person, you can claim back mileage from HMRC if you use your personal vehicle for business trips. This can help lower the amount of profit you’re taxed on.

How to Claim:

You have a couple of options for claiming:

A flat rate per mile using HMRC's Approved Mileage Allowance Payments (AMAPs)
Your actual vehicle running costs, which you can back up with receipts and records.

Flat Rate Mileage vs Actual Costs

If you decide to go with the flat rate, you need to start using it in the same year you begin using the vehicle for your business. Once you make that choice, you have to stick with it for that particular vehicle.

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Mileage Allowance for Limited Company Directors

If you're a director and you use your personal car for business trips, you can definitely claim mileage but you'll need to do it through your limited company.

Can Directors Claim Mileage?

Absolutely! Directors are considered employees when it comes to taxes. This means you can claim the HMRC mileage rates for using your own vehicle, just like any other employee would.

How to Reimburse Yourself

To get reimbursed, simply submit a mileage claim to your company. They can then pay you back tax-free at HMRC’s approved rates.

What Records Are Needed?

Your accountant or bookkeeper will need:

Your mileage log or expense report
A copy of any expense claims you've submitted
Details of the trips you've claimed

Pro Tip: Use accounting software like FreeAgent or Xero which makes logging mileage a breeze. Plus, GoForma clients get FreeAgent for free, which can save you time and help you stay organised!

Mileage Claims for Employees

When Your Employer Pays You

If your employer pays you the full HMRC rate, you don't require any further action! That payment is tax-free, so there’s no need to worry about including it on your tax return.

When to Claim Tax Relief via P87

If your employer pays you less than the HMRC rate, you can actually claim tax relief for the difference. You have the option to submit your claim online, by post, or even over the phone if it’s under £2,500. However, if you’re claiming more than £2,500 in a year, you’ll need to go through the Self Assessment tax return instead.

For instance:

Your employer pays 30p per mile
The HMRC rate is 45p
You can claim tax relief on the 15p difference for each mile

Over time, this can really add up and help lower your tax bill.

Key Difference

Business Trips You Can Claim Mileage For

Trips taken to complete work (i.e deliveries)
Trips between two workplaces for the same job
Going from an employee's home to a client
Going to a temporary workplace

What Doesn’t Qualify for Mileage Allowance

Commuting from home to your regular workplace
Travel to a permanent workplace, even from a different location
Driving to a location situated near your workplace (i.e. driving to client's office located just next to your home)
Trips in which your main purpose isn't business-related (i.e. running a business-related errand during a personal trip)

If you're unsure about what you can claim, it's best to clarify this with one of our accountants in London who can help with your business accounting.

Keeping a Mileage Log

If you’re driving for work, it’s super important to keep a clear and accurate mileage log. HMRC might ask for your records to back up your mileage claims, whether you’re working for someone else or a self employed individual. A well-maintained log not only helps you claim the right amount but also keeps you from making any mistakes.

What to Record in Your Mileage Log

To ensure your mileage log meets HMRC requirements, make sure to include these details for every trip:

Date of travel
Start and end location
Purpose of the journey
Number of miles driven
Vehicle used (if you use more than one)

How to Keep a Mileage Log

You can pick the method that works best for you. Some prefer the classic approach of jotting things down in a notebook, while others prefer the convenience of apps or spreadsheets.

Here are three popular ways to keep track of your mileage:

Paper Logbook – It’s easy to keep in your car. Just write down each trip as you go along.
Spreadsheet – Perfect for those who enjoy keeping things digital and organized.
Mileage Tracking App – These handy apps use GPS to track your journeys and often let you categorize trips as business or personal with just a tap. Some popular options include MileIQ and Autotrip, both of which are compliant with HMRC regulations.

HMRC suggests keeping your mileage records for at least five years after the tax return deadline. This way, they can verify your claims if they decide to review your return later.

24 Month Rule for Business Mileage

The 24-month rule is a guideline from HMRC that helps determine if travel to a workplace qualifies as business mileage. This rule is particularly relevant for those who travel to temporary workplaces, like contractors, agency workers, or employees on short-term assignments.

This rule is important because it affects whether you can claim tax-free mileage for travel to and from a workplace.

How the 24-Month Rule Works

According to HMRC, a workplace is considered temporary if:

You expect to work there for less than 24 months
You spend less than 40% of your working hours at that location

If both of these conditions are met, you can claim a mileage allowance for your travel between home and that site, as it’s considered a business journey.

However, if your time at that workplace exceeds 24 months or you find yourself spending more than 40% of your working time there, HMRC will classify it as a permanent workplace. In this scenario, your travel to and from the site is viewed as a regular commute, and you won’t be able to claim mileage for it.

Example of the 24-Month Rule

Imagine you start working at a client’s site for 2 days a week and expect to be there for 18 months. This qualifies as a temporary workplace, so you can claim mileage for your business travel.

But if your contract extends beyond 24 months, or if you begin working there more frequently (over 40% of your time), then the workplace will be considered permanent. At that point, you’ll need to stop claiming business mileage for trips to that location.

What are HMRC Advisory Fuel Rates?

HMRC Fuel Advisory Rates are the official rates that businesses rely on to determine how much they should reimburse employees for business travel in a company car. These rates come into play when employees use a vehicle owned by the company and cover the fuel costs themselves.

They’re also handy for reclaiming fuel expenses when a company pays for fuel used during both business and personal trips. In such cases, employees might need to pay back the portion of fuel used for personal travel to avoid any additional tax.

When Should You Use Fuel Advisory Rates?

Fuel Advisory Rates are primarily applicable in two scenarios:

1. An employee uses a company car for business travel and submits a claim for fuel costs.

2. An employer covers fuel for all trips, and the employee reimburses the cost for personal mileage.

These rates are based on the average fuel cost per mile, taking into account the vehicle’s engine size and the type of fuel used, whether it’s petrol, diesel, LPG, or electric.

How Frequently Do the Rates Change?

HMRC reviews and updates these rates quarterly in March, June, September, and December. This ensures that the rates stay aligned with the fluctuations in fuel prices.

You can always check the latest rates on the official HMRC website.

Frequently asked questions

What are the HMRC approved mileage rates for 2025/26?

For the 2025/26 tax year, HMRC approved mileage allowance payments (AMAPs) for cars and vans are 45p per mile for the first 10,000 business miles and 25p per mile after that. Motorcycles qualify at a flat 24p per mile for all business miles, and bicycles at 20p per mile. These rates cover fuel, insurance, wear and tear, so no separate receipts are needed when claiming at the flat rate.

What counts as business mileage for HMRC purposes?

Business mileage covers journeys made for work purposes, such as visiting clients, travelling between two workplaces, or attending a temporary site. Travel from home to a regular, permanent workplace counts as commuting and cannot be claimed. Under the 24-month rule, a workplace is considered temporary if the assignment is expected to last fewer than 24 months and less than 40% of working time is spent there.

How do employees claim business mileage from HMRC?

If an employer reimburses less than the HMRC approved rate, employees can claim tax relief on the shortfall. Claims under £2,500 per tax year can be submitted on Form P87, either online or by post. Claims over £2,500 must go through a Self Assessment tax return. If the employer already pays the full HMRC rate, no further claim is needed because the payment is tax-free.

How do self-employed people claim mileage on their tax return?

Self-employed individuals can use HMRC simplified mileage rates (45p/25p for cars, 24p for motorcycles, 20p for bicycles) and deduct the total as an allowable expense on their Self Assessment return. Alternatively, they can claim actual vehicle running costs with supporting receipts. Once a method is chosen for a particular vehicle, it must be used for the life of that vehicle. The actual-cost method is required if the vehicle was bought using capital allowances.

How does mileage work for company cars?

Company cars use HMRC advisory fuel rates rather than approved mileage allowance payments. These rates vary by engine size and fuel type (petrol, diesel, LPG, or electric) and are reviewed quarterly in March, June, September and December. Employees who pay for fuel in a company car can reclaim at advisory rates, whilst those whose employer covers all fuel must reimburse the personal mileage portion to avoid a tax charge.

What records do I need to keep for a mileage claim?

HMRC requires a mileage log recording the date of each journey, start and end points, total miles driven, and the business purpose of the trip. If more than one vehicle is used, the log should note which vehicle was taken. Records can be kept in a paper logbook, spreadsheet, or a GPS-based mileage tracking app. HMRC recommends retaining mileage records for at least five years after the Self Assessment filing deadline.

Can I claim extra mileage for carrying passengers?

Yes. If fellow employees travel with the driver on the same business journey, an additional 5p per mile can be claimed for each passenger. This passenger supplement applies on top of the standard HMRC mileage rate and is tax-free when paid by an employer. The passengers must be employees making the trip for business reasons; carrying family members or non-employees on personal errands does not qualify.

What are the HMRC mileage rates for motorcycles and bicycles?

Motorcycles qualify for 24p per mile on all business miles with no tiered reduction after 10,000 miles. Bicycles qualify at 20p per mile, again on all business miles. Both rates are designed to cover running costs including fuel or energy, maintenance and wear. These flat rates apply equally to employees, self-employed individuals, and company directors using their own motorcycle or bicycle for work travel.