The mileage rate has finally gone up. Here’s what it means for you.

If you use your own car for work, this one’s worth paying attention to. For the first time since 2011, HMRC has put up the approved mileage rate, and the change is already in effect.

The headline

From April 2026, the tax-free mileage rate (officially called the AMAP rate) has gone up from 45p to 55p per mile for the first 10,000 business miles in a tax year. After that, it stays at 25p per mile.

Chancellor Rachel Reeves confirmed the increase on 21 May 2026, and importantly it’s been backdated to the start of the 2026/27 tax year. So if you’ve been claiming since April, you can go back and reclaim at the higher rate.

A quick refresher on what counts

The mileage rate is for business travel in your own vehicle. Things like:

• Visiting clients or customers
• Travel between different work locations
• Field-based work or call-outs

It doesn’t cover your ordinary commute from home to your normal workplace. That bit hasn’t changed.

What hasn’t moved

A few rates have stayed the same:

• 25p per mile after the first 10,000 business miles
• 24p per mile for motorcycles
• 20p per mile for bicycles

So the big change is really the first 10,000 miles, which is where most people sit.

What you should do now

If you’re employed and your employer pays mileage: Check what rate they’re paying you. If it’s still 45p, you can claim the 10p difference back as Mileage Allowance Relief, via a P87 form (if your total work expenses claim is under £2,500) or through self assessment. If your employer pays more than 55p per mile, the excess counts as taxable income.

If you’re self-employed: Make sure your bookkeeping is using the new 55p rate from April onwards. If you’ve already submitted figures using 45p, we can look at adjusting those.

If you employ people who drive for work: This is a chance to look at your mileage policy. The increase doesn’t oblige you to pay more, but with fuel and running costs where they are, it’s a fair conversation to have with your team. And if you’ve been topping up over 45p with taxable additions, you may now be able to roll those into a single, tax-free payment.

Keep good records

Whatever your situation, keep a clear log of your business mileage with dates, journeys and reasons. HMRC can ask to see it, and a tidy record saves a lot of stress later.

If you’d like a hand