From 6 April 2026, the HMRC Approved Mileage Allowance Payment (AMAP) rate for cars and vans rises to 55p per mile for the first 10,000 business miles — the first increase since 2011. Announced on 21 May 2026 and legislated in the Taxation (Energy and Vehicles) Bill, the change is retrospective from the start of the 2026-27 tax year. Use the Mileage Allowance Calculator to see your tax-free amount at the new rate.
What changed and what stayed the same
| Vehicle | 2025-26 rate | 2026-27 rate | Change |
|---|---|---|---|
| Car or van (first 10,000 miles) | 45p | 55p | +10p |
| Car or van (over 10,000 miles) | 25p | 25p | unchanged |
| Motorcycle | 24p | 24p | unchanged |
| Bicycle | 20p | 20p | unchanged |
| Passenger (per passenger, same employer) | 5p | 5p | unchanged |
Only the first-tier car and van rate changed. The over-10,000-mile rate (25p), the motorcycle rate (24p), the bicycle rate (20p), and the passenger add-on (5p) are all unchanged. HMRC’s operative rates table already reflects 55p.
Who gains, and by how much
The 55p rate produces two headline numbers:
- 10,000 business miles in 2026-27 = £5,500 tax-free (was £4,500 — £1,000 per year more at the cap).
- An unreimbursed driver doing 8,000 miles claims 8,000 × 55p = £4,400 Mileage Allowance Relief — worth £880 at the 20% basic rate or £1,760 at the 40% higher rate.
Drivers who reach the 10,000-mile threshold capture the full £1,000 uplift. Under-threshold drivers gain 10p per business mile — a worker doing 6,000 business miles gains an extra £600 per year in tax-free income or claimable relief.
Employees: Mileage Allowance Relief at 55p
If your employer reimburses business mileage at less than 55p per mile — or nothing at all — you can claim the shortfall as Mileage Allowance Relief (MAR):
- P87 form: for total employment expenses (including MAR) of £2,500 or less per year. File online via your Government Gateway account or on paper. Use the P87 Calculator to check your claim amount before filing.
- Self Assessment: for total employment expenses above £2,500, or if you already file a Self Assessment return for other reasons.
The relief reduces your taxable income by the shortfall. A higher-rate taxpayer who drove 8,000 unreimbursed business miles in 2026-27 recovers £1,760 in tax.
2025-26 claims still use 45p
If you are claiming MAR for journeys made in the 2025-26 tax year (or any earlier year), the applicable rate is 45p per mile — not 55p. The 55p rate applies only from 6 April 2026. Filing an amended P87 or Self Assessment return for a prior year at 55p would overstate the relief.
Self-employed: simplified rates rise in step
Self-employed individuals using the simplified mileage method for their business vehicle now claim 55p per mile for the first 10,000 business miles in 2026-27. The simplified rate rises in step with AMAP.
Note: once you choose the simplified method for a particular vehicle, you must use it for the vehicle’s entire ownership period — you cannot switch to actual costs mid-life.
Claim the 55p rate as part of your trading expenses on your Self Assessment return. The UK Self-Employed Deduction Wizard maps all allowable HMRC expenses — including mileage — to SA103 categories.
Employers: reimbursement above and below 55p
The 55p rate defines what employers can pay tax-free:
- At or below 55p/mile (first 10,000 miles): the reimbursement is tax-free for the employee and deductible for the employer. No P11D reporting required on the AMAP-rate portion.
- Above 55p/mile: the excess is taxable employment income for the employee and subject to Class 1A National Insurance (15% in 2026-27) for the employer. Report the excess on Form P11D.
- Below 55p/mile (or nothing): the employee can claim MAR for the shortfall via P87 or Self Assessment.
Employers whose travel policies were pegged to the old 45p rate should update internal policies to 55p. Paying at 45p from 6 April 2026 means employees are under-reimbursed by 10p per mile and will need to file P87 claims to recover the difference.
Legislative status
The 55p rate was legislated in the Taxation (Energy and Vehicles) Bill, introduced following the 21 May 2026 announcement. The change is retrospective to 6 April 2026 — it applies to all qualifying business journeys from the start of the 2026-27 tax year, not only from the date of Royal Assent. HMRC’s operative rates table lists 55p and is the authoritative source.
Frequently asked questions
Can I claim 55p per mile for journeys I made in 2025-26? No. The 55p rate is effective from 6 April 2026 only. Claims for 2025-26 and earlier years use the 45p rate (25p over 10,000 miles). An amended P87 or Self Assessment return for a prior year at 55p would overstate the relief.
My employer pays 45p per mile. Is there now a shortfall I can claim? Yes — from 6 April 2026, if your employer continues to pay 45p, the 10p gap between 45p and 55p is claimable as MAR for each business mile in 2026-27 up to 10,000 miles. At 10,000 miles that is a £1,000 shortfall (worth £200 at basic rate, £400 at higher rate).
Does the passenger 5p rate change? No. The 5p add-on per passenger (same employer, same business journey) is unchanged for 2026-27.
Do electric vehicles get the 55p rate? Yes, for employee-owned EVs used for business mileage. The 55p AMAP rate applies regardless of fuel type. Company-owned EVs use HMRC’s Advisory Electricity Rate (AER) — a separate rate updated quarterly — not AMAP.
What records are needed to claim MAR at 55p? The same HMRC requirements apply: keep a mileage log recording the date, destination, purpose of the journey, and miles driven for each business trip, separating business miles from ordinary commuting.
Is the bicycle or motorcycle rate changing? No. Motorcycles remain at 24p per mile and bicycles at 20p per mile, unchanged for 2026-27.