If you use your own vehicle for work in the UK, HMRC mileage allowance is the main rule that decides how much your employer can usually pay you tax-free for qualifying business travel.
Plus, with the HMRC’s new Making Tax Digital initiative, keeping digital mileage records has become a must. Here’s everything you need to know.
HMRC Mileage Allowance Quick Facts
- Rate for cars and vans: 45p per mile for the first 10,000 business miles, then 25p per mile after that
- Motorcycle rate: 24p per mile
- Bicycles: 20p per mile
- Passenger payments: up to 5p per mile for each fellow employee on a qualifying business journey
- Ordinary commuting does not count as business mileage
What Is HMRC Mileage Allowance?
HMRC mileage allowance, often called AMAP or Approved Mileage Allowance Payments, is the approved amount an employer can usually pay an employee for using their own vehicle for work.
This article is for employees who use their personal vehicles for work, not company cars, which have different rules.
The reason why this matters is simple - if your employer pays up to the approved amount, that payment is usually free of tax and National Insurance. If they pay less, you may be able to claim tax relief on the difference. However, if they pay more, the excess may be taxable.
HMRC Mileage Rates for 2026
For employees using their own vehicle for work, the approved mileage rates are:
- Cars and vans: 45p for the first 10,000 business miles, then 25p after that
- Motorcycles: 24p per mile
- Bicycles: 20p per mile
If you carry another employee as a passenger on a qualifying business journey, your employer can also pay up to 5p per mile per passenger.
That passenger payment is separate from the main mileage rate, so it’s worth checking if your employer includes it.
What Counts as Business Mileage?
In general, business mileage means travel you do for work that’s not your typical commute or any sort of private travel. That includes trips like:
- Driving to a client or customer meeting
- Traveling between office or job sites
- Going to a temporary workplace
- Making a work-related trip that’s part of your job duties
What Doesn’t Count as Business Mileage?
The biggest and most common mistake people make when claiming mileage is related to commutes. Your regular commute to work does not qualify as business mileage.
That refers to your travel between your home and your regular workplace. Even if the drive is long, done in your own car, or happens every work day, HMRC treats that as personal travel rather than business mileage.
How to Calculate HMRC Mileage Allowance
Step 1: Identify your qualifying business miles
Start by separating business journeys from normal commuting and personal trips. You can do this manually, or use a mileage tracker app that can auto-categorize these trips for you.
Step 2: Multiply your mileage by the current HMRC rate
Make sure you use the right rate based on the type of vehicle you used.
Step 3: Add any passenger payment if it applies
If you carried a fellow employee on a qualifying work drive, add up to 5p per mile for that passenger.
Step 4: Compare the approved amount with what your employer paid
It’s definitely important to double-check to make sure you were reimbursed the correct amount!
Example HMRC Mileage Allowance Calculation
Let’s say you drove 2,000 miles for business-related purposes with your personal vehicle this year. At 45p per mile, your reimbursement would be:
2,000 * £0.45 = £900
If your employer paid you 35p per mile instead, you would receive £700. The remaining difference would be £200, which you may be able to claim on your taxes via Mileage Allowance Relief.
What If Your Employer Pays You More or Less Than the HMRC Rate?
If your employer pays less than the HMRC rate, that doesn’t automatically mean your reimbursement was incorrect. It just means you can claim Mileage Allowance Relief on the difference.
If your employer pays you more than the rate, the excess is treated as taxable income.
Because of this, the HMRC rate matters significantly even when your company has its own internal mileage policy.
Note: Company Cars Use Different Rules
If you drive a company car, the information in this article does not work the same way for you.
The HMRC rate for reimbursement is for employees using their own vehicles. Company cars use advisory fuel rates instead.
For fully electric company cars, the HMRC has advisory electric rates, with separate rates for home charging and public charging.
What Records You Need to Keep for HMRC Mileage Allowance
Even if your employer has a simple mileage reimbursement process, you still need to keep clear, accurate records.
A good mileage record should include:
- The date of the journey
- Where you traveled to and from
- The trip’s purpose
- The number of business miles
- Whether any fellow employees traveled with you
Good records make it easier to support a claim, check your reimbursement amount, and claim tax relief if needed.
HMRC Mileage Allowance FAQ
Does commuting count as business mileage?
No. Travel from your home and your regular place of work is treated as personal mileage, not business mileage.
Can I claim tax relief if my employer pays less than the HMRC rate?
Usually yes. In this situation, you may be able to claim Mileage Allowance Relief on the difference between what you were paid and the approved amount.
Do electric cars use a different HMRC mileage rate?
If it is your own electric car, the normal car mileage rate applies. If it is a company electric car, different advisory rates apply.
Can I claim mileage if I use a company car?
Not under the normal AMAP rules for your own vehicle. Company cars follow separate fuel or electric-rate guidance.
Conclusion
HMRC mileage allowance is not too complicated once you know the three big rules: what counts as business mileage, what the approved rates are, and whether you are using your own vehicle or a company car.
Get those right, keep a clean mileage log, and it becomes much easier to work out what you should be paid or what tax relief you may be able to claim.
TripLog helps make that easier by tracking business mileage automatically and keeping your records organized in one place! Download TripLog and start tracking unlimited miles automatically for free on iOS or Android today.
