RealCost Guide

Mileage Allowance Relief UK

If your employer pays you less than HMRC’s approved mileage rate — or doesn’t pay you anything for business mileage at all — you can usually claim tax relief on the shortfall.

This is called Mileage Allowance Relief (MAR), and a lot of employees who’d qualify never claim it.

Work out the full tax-free amount first

Before you can work out your relief, you need to know the maximum you could have been paid tax-free. Use the calculator below, then subtract what your employer actually paid you.

Vehicle type

Business miles driven this tax year Only business travel counts — not your normal commute to a permanent workplace.

Passenger miles (optional) Business miles where you carried a fellow employee as a passenger. Attracts an extra 5p/mile you can claim on top.

Total tax-free mileage allowance £0

First 10,000 miles £0

Miles above 10,000 £0

Passenger payments £0

Uses HMRC's current Approved Mileage Allowance Payment (AMAP) rates for the 2026/27 tax year onwards: 55p/mile for cars and vans (first 10,000 business miles), 25p/mile after that, 24p/mile flat for motorcycles, 20p/mile flat for bicycles, plus 5p/mile per passenger. This is what you or your employer can pay tax-free — if you're paid less than this by your employer, you can claim Mileage Allowance Relief on the difference from HMRC. Always confirm your specific situation at gov.uk.

How Mileage Allowance Relief works

The AMAP rate (55p per mile for the first 10,000 business miles, 25p after) is the maximum your employer can pay you tax-free. It isn’t a legal minimum they have to pay.

If your employer pays less than that — a common example is a fixed 25p or 30p per mile regardless of distance — you can claim tax relief on the difference between what you were paid and what you could have been paid tax-free. You get relief at your marginal tax rate, not a full pound-for-pound refund of the shortfall itself.

Worked example

You drive 6,000 business miles in a tax year. Your employer pays you a flat 25p per mile.

Maximum tax-free (55p)

£3,300

Actually paid (25p)

£1,500

Shortfall you can claim relief on

£1,800

If you’re a basic-rate (20%) taxpayer, that shortfall is worth around £360 back in tax relief — not the full £1,800.

How to claim

Self Assessment
If you already file a tax return, claim it there.

Form P87
If you don’t file a return, use HMRC’s P87 form (online or postal) instead.

Time limit
You can usually claim for the last 4 tax years, not just the current one.

Mileage Allowance Relief FAQs

What if my employer pays nothing at all?

You can claim relief on the full AMAP amount, since the shortfall is the entire tax-free maximum.

Does this apply to ordinary commuting?

No. Mileage Allowance Relief only applies to genuine business mileage — your normal commute to a permanent workplace doesn’t qualify.

What records do I need?

A mileage log (date, journey, purpose, miles) and evidence of what your employer actually paid you per mile.

Can I claim if I’m self-employed?

Mileage Allowance Relief specifically is for employees. Self-employed people claim mileage differently, through simplified expenses on their tax return.

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