Calculate business mileage using the latest HMRC mileage rates, understand mileage reimbursement and tax relief, and keep accurate records of every business journey with FirstMileage GPS mileage tracking.
HMRC publishes approved mileage rates that can be used for qualifying business journeys. The rules are different depending on whether you are an employee using your own vehicle, self-employed, or driving a company car.
Estimate the approved mileage amount for your qualifying business miles under the 2026–27 rates.
These are the approved mileage rates for the 2026–27 tax year.
| Vehicle | First 10,000 business miles | Over 10,000 business miles |
|---|---|---|
| Cars and vans | 55p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
If an employee uses their own vehicle for qualifying business journeys, an employer can make Mileage Allowance Payments.
The approved amount is calculated by multiplying qualifying business miles during the tax year by the applicable HMRC mileage rate.
An employer can pay up to the approved amount for qualifying business mileage without the payment being treated as taxable pay under the relevant MAP rules.
Employers can choose their own mileage reimbursement policy, provided the appropriate tax rules are followed.
If an employer pays less than the applicable approved amount, an eligible employee may be able to claim Mileage Allowance Relief on the qualifying unused balance.
The unused mileage amount is not itself a cash refund. The actual tax saving depends on the employee's tax position.
If an employer pays more than the approved amount, the excess can become taxable and must be handled under the relevant payroll and reporting rules.
Suppose an employee uses their own car and records 12,000 qualifying business miles during 2026–27.
The first 10,000 miles use the 55p rate and the remaining 2,000 miles use the 25p rate.
If your employer pays less than the applicable approved mileage amount, you may be able to claim tax relief on the qualifying difference.
Work out your qualifying business miles and apply the appropriate HMRC rate.
Deduct the amount your employer actually paid towards your qualifying business mileage.
Any potential tax saving depends on your Income Tax rate and your eligibility to claim.
Accurate mileage records are important when claiming or supporting business travel expenses.
For certain employee mileage tax-relief claims, HMRC says mileage logs must include the reason for each journey and the postcode for the start and end points.
This is why maintaining accurate trip records throughout the year is much easier than reconstructing your mileage later.
Calculating 55p per mile is easy. Remembering every business journey throughout an entire tax year is not.
FirstMileage uses GPS mileage tracking to help you automatically record your real journeys, keep trip history organised and generate mileage reports when you need them.
Not every mile you drive for work automatically qualifies as business mileage.
Regular travel between your home and permanent workplace is generally ordinary commuting and does not qualify as business travel for employee mileage relief.
Journeys between qualifying workplaces can be business travel, depending on the circumstances.
Travel to a qualifying temporary workplace may be eligible, subject to HMRC's temporary workplace rules.
The rules around temporary workplaces can be more complicated than simply asking whether a workplace is "temporary".
A workplace can cease to qualify as temporary where an employee attends it as part of continuous work expected to last more than 24 months and spends 40% or more of their working time there.
If the workplace becomes permanent under the rules, travel between home and that workplace is generally treated as ordinary commuting rather than deductible business travel.
The tax treatment can change when the expected duration of an assignment changes. HMRC guidance contains examples where travel relief is available initially but stops after the expected period becomes longer than 24 months.
The 40% test is based on working time at the particular workplace. It is not simply a test based on the number of days someone works in a standard full-time job.
Self-employed individuals may be able to use simplified vehicle expenses instead of calculating their actual vehicle running costs.
For 2026–27, cars and goods vehicles use 55p for the first 10,000 business miles and 25p after that.
The simplified mileage rate for motorcycles is 24p per business mile.
Simplified expenses are optional. Depending on your circumstances, you may instead calculate the business proportion of actual vehicle costs.
Under the 2026–27 simplified mileage rates, an eligible self-employed driver with 11,000 qualifying business miles could calculate:
The 10,000-mile threshold is not automatically reset simply because you change vehicles.
For employee Mileage Allowance Payments, business mileage is calculated together rather than creating a new 10,000-mile allowance for every vehicle.
Even where mileage is combined for the HMRC calculation, keeping an accurate record of which vehicle was used for each journey can make your records easier to manage.
The 10,000-mile calculation can interact with separate employments, so people with multiple jobs should not automatically combine all mileage into one calculation.
HMRC allows a separate passenger payment for certain qualifying employee journeys.
The passenger payment is 5p per passenger per business mile when carrying fellow employees in a car or van on journeys which are also work journeys for those passengers.
The passenger payment is in addition to the normal mileage allowance rules. It is specifically for qualifying passenger payments and is not simply another 5p added to every mile.
Do not automatically apply the 55p / 25p employee-owned vehicle rates to a company car.
Employees using their own qualifying vehicle for business travel can fall under the Approved Mileage Allowance Payments rules.
Company car fuel reimbursement can fall under HMRC's Advisory Fuel Rates and separate company-car tax rules.
The tax and National Insurance treatment is not identical in every respect.
For cars and vans in 2026–27, the approved Income Tax mileage rate is 55p for the first 10,000 business miles and 25p thereafter.
For the relevant National Insurance motoring-expense calculation, the higher rate can apply to all qualifying business miles rather than using the same 55p/25p split used for Income Tax.
Organisations can make mileage payments to volunteers under separate rules. Volunteer mileage should not automatically be treated exactly like employee mileage.
If you drive for a charity or voluntary organisation, maintain records of your qualifying mileage and payments. The relevant volunteer mileage rules can depend on the organisation and circumstances.
A person can know the HMRC mileage rate perfectly and still lose money or waste time because their mileage records are incomplete.
Remembering every trip, destination and business purpose over months can become tedious and error-prone.
Trying to rebuild your mileage at the end of the tax year can mean searching calendars, emails and memories.
GPS mileage tracking can help create a continuous history of actual journeys so you have a better starting point for organising your business mileage.
Let FirstMileage help you record your real journeys with GPS, organise your trip history and generate mileage reports instead of rebuilding your driving history later.
Start Tracking with FirstMileage →Answers to common questions about HMRC mileage rates, reimbursement, tax relief and mileage tracking.
For cars and vans, the rate is 55p per mile for the first 10,000 business miles and 25p per mile after 10,000. Motorcycles are 24p and bicycles are 20p per business mile.
The 55p rate applies from 6 April 2026 for the 2026–27 tax year. It replaced the previous 45p first-10,000-mile rate.
No. It is an approved mileage rate. An eligible employee whose employer pays less than the applicable approved amount may be able to claim tax relief on the qualifying difference.
It depends on the qualifying mileage shortfall, your Income Tax rate and your individual eligibility. The mileage shortfall is not itself a cash refund.
For employee Income Tax mileage allowance payments using a car or van, the 55p rate applies to the first 10,000 business miles in the tax year. Additional miles are generally 25p.
No. Using more than one vehicle does not automatically create another 10,000-mile higher-rate allowance for employee MAP calculations.
Regular travel between home and a permanent workplace is generally ordinary commuting and does not qualify as normal business mileage for employee tax relief.
A workplace can qualify as temporary where attendance is for a limited duration or temporary purpose, subject to HMRC's rules. The 24-month and 40% tests can affect the result.
Broadly, where an employee spends 40% or more of their working time at a workplace and the period of continuous work there lasts or is expected to last more than 24 months, the workplace can be treated as permanent for these travel rules.
Eligible self-employed individuals may use HMRC simplified vehicle expenses based on business mileage, subject to the relevant rules and restrictions.
For eligible cars and goods vehicles, the simplified mileage rate is 55p for the first 10,000 business miles and 25p after that. Motorcycles use 24p per mile.
Generally, you cannot use simplified mileage expenses for a vehicle where you have already claimed capital allowances or included the vehicle cost as an expense when calculating profits. Check the detailed HMRC rules for your circumstances.
The passenger payment is 5p per passenger per business mile for qualifying journeys in a car or van carrying fellow employees where the journey is also a work journey for them.
Not automatically. Company-car fuel reimbursement can be subject to different HMRC rules, including Advisory Fuel Rates.
Depending on the claim, useful records can include the date, reason for the journey, starting location, destination and mileage. HMRC's employee tax-relief guidance specifically requires mileage logs to include the reason and start/end postcodes for relevant claims.
GPS tracking can help automatically record journeys instead of relying on memory or manual logs. FirstMileage is designed to help organise real mileage history and generate mileage reports.
Yes. FirstMileage's core tool tracks real mileage using GPS and provides mileage reporting functionality, helping you turn your recorded journeys into organised mileage information.
Always check the latest GOV.UK guidance before making a tax claim.
FirstMileage helps you record your real driving activity with GPS, organise your mileage history and generate mileage reports when you need them.
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