HMRC Mileage Rates 2026: New 55p Rate, Fuel Rates And Tax Relief Explained

HMRC mileage rates 2026 have changed for people using their own cars or vans for work. From 6 April 2026, the approved rate is 55p per business mile for the first 10,000 miles in the tax year, up from the previous 45p rate. After 10,000 miles, the rate remains 25p per mile.

Motorcycles remain at 24p per mile and bicycles at 20p per mile. The higher car and van rate also applies to qualifying simplified mileage expenses for self-employed workers.

For employees, contractors and small businesses across London, the change could make a noticeable difference to the amount that can be reimbursed tax-free or used when calculating mileage tax relief.

The change is particularly important because the increase was announced after the start of the tax year but applies retrospectively from 6 April 2026.

What Are The HMRC Mileage Rates For 2026?

The approved mileage rates for the 2026/27 tax year, which runs from 6 April 2026 to 5 April 2027, are:

Vehicle	First 10,000 Business Miles	After 10,000 Miles
Car or van	55p per mile	25p per mile
Motorcycle	24p per mile	24p per mile
Bicycle	20p per mile	20p per mile

For cars and vans, the first 10,000-mile threshold applies across the tax year rather than restarting each month or every time an employee changes vehicle.

Electric and hybrid cars and vans used as an employee’s own vehicle are included within the car and van category for these statutory mileage rates.

There is also a 5p per passenger per business mile allowance where an employee carries another employee in their own car or van on a qualifying work journey.

What Changed From The Previous HMRC Mileage Rate?

The biggest change is the rise from 45p to 55p per mile for the first 10,000 business miles travelled in a privately owned car or van.

Before 6 April 2026, the standard rate had been:

• 45p Per Mile: First 10,000 business miles
• 25p Per Mile: Business miles above 10,000

From 6 April 2026 it became:

• 55p Per Mile: First 10,000 business miles
• 25p Per Mile: Business miles above 10,000

That means someone completing exactly 10,000 qualifying business miles could have an approved mileage amount of £5,500 in 2026/27, compared with £4,500 under the previous rate.

The increase was formally announced in June 2026 but was made retrospective to the start of the tax year. The Government has also said the rates will be reviewed beyond 2026/27.

How Much Can You Claim Using The 2026 Mileage Rate?

Consider an employee using their own car for 8,000 business miles during the tax year.

The approved amount is:

8,000 × 55p = £4,400

If the employee instead travels 12,000 business miles, the calculation changes once they cross 10,000 miles:

Mileage	Calculation	Amount
First 10,000 miles	10,000 × 55p	£5,500
Next 2,000 miles	2,000 × 25p	£500
Total		£6,000

This is the approved mileage amount for tax purposes. It does not mean every employer has to pay employees exactly this amount.

Employers can set their own reimbursement rate, but the HMRC figure determines how much can generally be paid without creating an Income Tax charge under the approved mileage allowance system.

What If Your Employer Pays Less Than 55p Per Mile?

Employees may be able to claim Mileage Allowance Relief if their employer pays less than the HMRC-approved amount.

For example, suppose you drive 4,000 qualifying business miles and your employer pays 35p per mile.

Your HMRC-approved amount would be:

4,000 × 55p = £2,200

Your employer pays:

4,000 × 35p = £1,400

That leaves an £800 mileage allowance shortfall.

You may be able to claim tax relief on that £800. You do not normally receive the full £800 from HMRC. The value of the relief depends on the Income Tax you pay.

For example, tax relief at 20% on an £800 qualifying amount would be worth £160.

HMRC confirms that Mileage Allowance Relief can apply where an employee uses their own vehicle for business travel and receives less than the approved mileage amount.

What Counts As Business Mileage?

Not every mile travelled because of work qualifies.

Ordinary commuting between your home and your permanent workplace is generally considered private travel for tax purposes and does not qualify for mileage tax relief.

Business mileage can potentially include journeys such as:

• Travelling Between Work Locations
• Visiting Customers Or Clients
• Attending Meetings Away From Your Permanent Workplace
• Travelling To Certain Temporary Workplaces
• Making Work-Required Journeys During The Working Day

The distinction is particularly relevant in London, where employees may work from a central office but regularly travel to clients, construction sites, events or other business locations.

HMRC defines ordinary commuting as travel between home and a permanent workplace. Travel to a qualifying temporary workplace can be treated differently, although the rules become more complicated where the journey is substantially the same as a normal commute.

Are Company Car Mileage Rates The Same?

No. This is one of the most common areas of confusion.

The 55p rate applies when an employee uses their own car or van for qualifying business travel.

Company cars normally use HMRC’s separate Advisory Fuel Rates, which are intended primarily to calculate fuel reimbursement for business travel in company cars or the amount an employee should repay for private fuel.

From 1 September 2026, the company-car advisory fuel rates are:

Engine Size	Petrol	LPG
1,400cc or less	14p	11p
1,401cc to 2,000cc	17p	13p
Over 2,000cc	27p	20p

For diesel company cars:

Engine Size	Diesel Rate
1,600cc or less	15p
1,601cc to 2,000cc	16p
Over 2,000cc	22p

Hybrid company cars are treated as petrol or diesel cars for these advisory rates.

What Is The HMRC Electric Car Mileage Rate In 2026?

Again, the answer depends on who owns the vehicle.

If an employee uses their own fully electric car for business journeys, the normal approved mileage allowance can apply, meaning 55p per mile for the first 10,000 qualifying miles and 25p afterwards.

For a fully electric company car, HMRC uses separate advisory electricity rates.

From 1 September 2026 these are:

• 7p Per Mile: Home charging
• 15p Per Mile: Public charging

Where a company car is charged using both home and public charging, HMRC allows mileage to be apportioned on a fair and reasonable basis. A higher reimbursement can also be used where the employer can demonstrate that the actual electricity cost per mile was higher.

What Are The Mileage Rules For Self-Employed Workers?

The 2026 change also affects self-employed people who use HMRC’s simplified expenses method.

Instead of calculating fuel, insurance, repairs, servicing and other vehicle running expenses individually, eligible businesses can calculate a deduction using business mileage.

For 2026/27, the simplified rates are:

• Cars And Goods Vehicles: 55p for the first 10,000 miles
• Cars And Goods Vehicles: 25p after 10,000 miles
• Motorcycles: 24p per mile

HMRC says that once a self-employed person starts using the flat-rate method for a particular vehicle, they must continue using that method while that vehicle remains in the business.

Separate qualifying travel costs, such as train fares and parking, can still potentially be claimed in addition to simplified vehicle expenses.

What Mileage Records Should You Keep?

Good records matter if you are reimbursed for business mileage or intend to claim tax relief.

HMRC’s mileage-relief guidance says mileage logs submitted for a claim should include the reason for the journey and the postcodes for its starting and finishing points.

A practical mileage record should therefore include:

• Date Of Journey
• Starting Location
• Destination
• Business Purpose
• Number Of Business Miles
• Vehicle Used
• Amount Reimbursed By Employer

Workers should avoid estimating an entire year’s mileage from memory. Keeping records as journeys happen makes it easier to separate genuine business travel from commuting and private mileage.

What Should Drivers And Businesses Do Now?

Anyone still using the old 45p figure for journeys made since 6 April 2026 should check whether their calculations need updating.

Businesses should review payroll and expenses policies to ensure staff understand the new 55p approved amount, particularly where mileage systems were configured before the June announcement.

Employees whose employers reimburse below the approved HMRC rate should also check whether they are eligible for Mileage Allowance Relief.

The main figures to remember for HMRC mileage rates 2026 are straightforward: 55p for the first 10,000 business miles in your own car or van, 25p afterwards, 24p for motorcycles and 20p for bicycles.

For company cars, however, the separate advisory fuel and electricity rates apply, so identifying who owns the vehicle and what type of journey was made is essential before calculating any mileage payment or tax relief.