RealCost Guide

HMRC Mileage Rate 2026/27 Explained

The HMRC mileage rate for cars and vans rose from 45p to 55p per mile from the 2026/27 tax year — the first change since 2011.

Here’s exactly what changed, what stayed the same, and what it means for your mileage claims.

Quick summary: cars and vans now earn 55p per mile for the first 10,000 business miles in the tax year (up from 45p), then 25p per mile after that (unchanged). Motorcycle (24p) and bicycle (20p) rates are also unchanged.

What actually changed

Vehicle / band	2025/26 rate	2026/27 rate
Car/van, first 10,000 miles	45p	55p
Car/van, over 10,000 miles	25p	25p (unchanged)
Motorcycle	24p	24p (unchanged)
Bicycle	20p	20p (unchanged)
Passenger payment	5p	5p (unchanged)

See what the new rate means for you

Enter your business mileage to see your tax-free allowance under the current 2026/27 rates.

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.

Why does this matter?

The 45p rate had stood since 2011 despite fuel prices, insurance and running costs all rising substantially since then — many commentators had argued it no longer reflected the real cost of business motoring. The 10p increase to 55p is the first adjustment in 15 years.

For a driver doing 8,000 business miles a year, the increase alone is worth an extra £800 in tax-free allowance compared with the old rate.

2026/27 rate change FAQs

When did the new rate take effect?

The 55p rate applies from the start of the 2026/27 tax year, 6 April 2026 onwards.

Do I need to do anything differently to claim it?

No. It’s the same claim process as before — just a higher rate for the first 10,000 miles. Employers should update their payroll/expenses systems to reflect the new rate.

Is my employer required to pay the new rate?

No. The AMAP rate is the tax-free maximum, not a legal minimum. If your employer pays less, you can claim Mileage Allowance Relief on the difference.

Did the rate for miles over 10,000 also change?

No, that stays at 25p per mile. Only the first-10,000-miles rate for cars and vans increased.

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