From 6 April 2026, HMRC’s approved mileage rate for cars and vans increased from 45p to 55p per mile for the first 10,000 business miles in the tax year.
That might sound like a small change, but for business owners, directors and employees who use their own vehicle for work journeys, it is worth getting right.
What can you claim?
If you use your own car or van for business journeys, the approved mileage rates are now:
| Vehicle | First 10,000 business miles | Over 10,000 business miles |
|---|---|---|
| Car or van | 55p per mile | 25p per mile |
| Motorcycle | 24p per mile | 24p per mile |
| Bicycle | 20p per mile | 20p per mile |
The 55p rate applies from the 2026/27 tax year onwards. See HMRC’s rates here Travel — mileage and fuel rates and allowances – GOV.UK
What does the mileage rate cover?
The mileage allowance is designed to cover more than just fuel. It also takes into account running costs such as insurance, servicing, wear and tear, tyres, and general vehicle costs.
That means you usually cannot claim mileage and then separately claim fuel, repairs, insurance or other running costs for the same personal vehicle.
What counts as business mileage?
Business mileage usually includes journeys such as:
- travelling to visit a client;
- travelling between temporary workplaces;
- going to a supplier meeting;
- attending a business event or training course;
- making a business delivery or collection.
It does not usually include ordinary commuting from home to your normal place of work.
This is one of the areas where people can get caught out. Just because you are travelling “for work” does not automatically make it business mileage for tax purposes.
What if the company pays less than 55p?
If your employer, or your own company, pays you less than the approved HMRC rate, you may be able to claim tax relief on the difference.
For example, if your company pays 30p per mile and the approved rate is 55p, there is a 25p per mile shortfall. You may be able to claim tax relief on that shortfall personally.
What if the company pays more than 55p?
If the company pays more than the approved HMRC rate, the excess could become taxable and may need reporting through payroll or benefits reporting.
For example, if an employee is paid 65p per mile when the approved rate is 55p, the extra 10p per mile could be taxable.
What records should you keep?
This is where the admin matters.
For every mileage claim, keep a record of:
- the date of the journey;
- where you travelled from and to;
- the reason for the trip;
- the number of business miles;
- the vehicle used.
A calendar entry on its own is not always enough. You need enough information to show that the journey was genuinely for business.
Company car or personal car?
The 55p mileage rate applies where you use your own vehicle for business journeys.
If you drive a company car, different rules apply. In that case, HMRC’s advisory fuel rates are usually used where the company reimburses fuel for business travel, or where the employee repays private fuel.
See the HMRC advisory fuel rates here: Advisory fuel rates – GOV.UK
So before making a claim, check whether you are dealing with:
- your own car used for business; or
- a company car; or
- a company van; or
- an electric vehicle.
The tax treatment can be different.
Why this matters for business owners
Mileage claims are one of those simple-looking areas that can easily become messy.
If you underclaim, you could be missing out on legitimate tax relief.
If you overclaim, you could create a tax issue for the company or the individual.
And if you do not keep proper records, it becomes much harder to defend the claim if HMRC ever asks questions.
Practical action point
If you or your team use personal vehicles for business journeys, now is a good time to check:
- are you using the updated 55p rate from 6 April 2026?
- are claims being recorded properly?
- are employees clear on what is and is not business mileage?
- are company car journeys being treated differently?
- does your expenses policy need updating?
A small change in the mileage rate is a good reminder to tighten up the proces.
