HMRC Mileage Rates 2026: Are You Claiming Everything You're Owed?
- Jun 5
- 5 min read
Author: Sam
If you’ve been running a small business or working as a mobile professional in the UK for any length of time, you’ll know that the HMRC mileage rate has been stuck at 45p per mile since... well, since what feels like the dawn of time. But as we move into the 2026/27 tax year, there is finally some massive news for your wallet.
HMRC has officially increased the Approved Mileage Allowance Payment (AMAP) rates. The headline? That long-standing 45p is officially a thing of the past. As of April 6, 2026, the rate has jumped to 55p per mile.
This 10p increase might not sound like a life-changing amount on a single trip to the post office, but for SMEs and sole traders racking up thousands of miles a year, it adds up to a significant tax saving or a much-needed boost to your reimbursed expenses. In this guide, we’re going to break down everything you need to know about the 2026 rates, how to make sure you’re claiming every penny, and why keeping a tidy log is more important than ever.
The 2026 HMRC Mileage Breakdown: What’s New?
The 2026 update isn't just about the 55p rate for cars. HMRC has adjusted the landscape to reflect the rising costs of vehicle maintenance, insurance, and fuel. Here is the official breakdown for the 2026/27 tax year:
Vehicle Type | First 10,000 Business Miles | Each Business Mile Over 10,000 |
Cars and Vans | 55p | 25p |
Motorcycles | 24p | 24p |
Bicycles | 20p | 20p |
The Passenger Supplement
Don't forget the "buddy bonus." If you are carrying a fellow employee in your car or van on a business journey, you can claim an additional 5p per mile per passenger. This is a great way to encourage carpooling to meetings while putting a little extra back into the business travel budget.
Why the Change?
The jump from 45p to 55p is a response to the sustained increase in the "total cost of motoring." Between fluctuating fuel prices and the rising cost of EV charging and vehicle repairs, the 45p rate simply wasn't cutting it for most business owners. This new 55p rate is designed to cover not just fuel, but the wear and tear on your personal vehicle.
Business vs. Personal: Drawing the Line
One of the biggest pitfalls business owners face is distinguishing between "business" and "personal" travel. HMRC is notoriously strict here, and getting it wrong can lead to some uncomfortable conversations during an audit.
What Counts as Business Mileage?
To claim that sweet 55p per mile, the journey must be "wholly and exclusively" for business. This includes:
Visiting Clients or Customers: Driving to a meeting at a client’s office or a job site.
Supply Runs: Popping over to a wholesaler or picking up materials.
Temporary Workplaces: If you are based at a site that isn't your permanent office for a period of less than 24 months, travel to that site usually counts.
Work Errands: Going to the bank for business deposits or visiting the accountant (though with online accounting services, you might be doing this less often!).
What Definitely Doesn't Count?
Ordinary Commuting: This is the big one. Driving from your home to your regular, permanent place of work is considered personal travel. You cannot claim mileage for your daily commute.
The "School Run" Detour: If you drive to a client but stop to drop your kids at school on the way, you can only claim the mileage for the direct route to the client. The detour is personal.
Private Trips: Weekend grocery runs or holidays in the business van don't qualify.
Understanding these distinctions is vital to staying on the right side of essential tax deadlines and regulations.
How to Keep a Flawless Mileage Log
HMRC doesn't just take your word for it. If you’re claiming thousands of pounds in mileage expenses, you need the receipts: or in this case, the logs: to back it up. A "guess-timate" at the end of the tax year is a recipe for disaster.
To stay compliant, your mileage log should record:
The Date of the journey.
The Start and End Point (Postcodes are best).
The Purpose of the trip (e.g., "Meeting with Smith & Co re: New Contract").
The Total Miles driven.
Go Digital
While a paper logbook (like the one in the photo above) works, it's 2026! There are dozens of apps: and even features within software like Xero or QuickBooks: that use GPS to track your trips automatically. You just swipe right for business and left for personal. It saves hours of manual entry and ensures you never forget a trip. For more on choosing the right tech, check out our guide on Xero vs QuickBooks.
Self-Employed vs. Employees: How Do You Get Paid?
The way you access that 55p rate depends on how your business is structured.
For the Self-Employed (Sole Traders)
You can use "Simplified Expenses." Instead of calculating the actual cost of running your car (insurance, repairs, fuel, etc.), you simply total up your business miles at the end of the year and multiply the first 10,000 by 55p. This total is then deducted from your profits before you pay tax. It’s a huge time-saver and, with the new higher rate, often more financially beneficial than the "actual cost" method.
For Employees and Directors
If you work for a limited company (even your own), the company can pay you 55p per mile tax-free.
If the company pays you less: (e.g., they only give you 40p), you can claim Mileage Allowance Relief (MAR) from HMRC for the 15p difference.
If the company pays you more: (e.g., they give you 60p), the extra 5p is treated as a "benefit in kind" and you will have to pay tax on it.
Why a Good Accountant is Vital for Tracking Expenses
You might be thinking, "It’s just multiplication, why do I need an accountant?"
The truth is, mileage is often the tip of the iceberg. A professional accountant doesn't just add up your miles; they look at the bigger picture. Are you better off with the mileage allowance or should you buy a company electric vehicle and use Advisory Electricity Rates? Are you claiming for your passengers? Are your records robust enough to survive an HMRC enquiry?
An accountant can identify tax-saving tips that go far beyond your car's odometer. They ensure that your business remains efficient and compliant, freeing you up to focus on growth rather than spreadsheets.
Don't Leave Money on the Table
The move to 55p per mile is a welcome change for the UK's SME community. However, with higher rates comes higher scrutiny. HMRC will be looking closely at mileage claims to ensure they are legitimate.
If you’re feeling overwhelmed by the paperwork or unsure if you’re maximizing your claims, it’s time to speak to an expert. Whether you are looking for a small business accountant in London or a specialist tax advisor, we can help.
At Accountant Search, we specialize in matching business owners like you with the perfect accounting partner. Don't let the 2026 changes pass you by: make sure your business is optimized for the road ahead.
Ready to find an accountant who can help you navigate the new HMRC rates? Start your search today.
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