The Government has announced the first increase in the Approved Mileage Allowance Payments (AMAPs) rate for cars and vans since 2011.
From 6 April 2026, the approved mileage rate for the first 10,000 business miles has increased from 45p to 55p per mile, providing greater tax-free reimbursement for employees and directors using their own vehicles for work, while also increasing the simplified mileage rate for many self-employed individuals.
What’s Changing?
From 6 April 2026, the approved mileage rates are:
| Vehicle | First 10,000 business miles | Over 10,000 business miles |
|---|---|---|
| Cars and vans | 55p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
Only the rate for cars and vans has increased. Motorcycle and bicycle rates remain unchanged.
What Are Approved Mileage Allowance Payments (AMAPs)?
Approved Mileage Allowance Payments (AMAPs) are the tax-free mileage rates that employers can pay employees who use their own vehicle for qualifying business journeys.
This includes directors who use their personally owned car or van for business travel.
Provided payments do not exceed the approved HMRC rates:
- No Income Tax is payable.
- No National Insurance contributions are due.
What Is Mileage Allowance Relief (MAR)?
If your employer reimburses business mileage at less than the approved rate, you may be able to claim Mileage Allowance Relief (MAR) from HMRC on the difference.
For example, if your employer pays 40p per mile when the approved rate is 55p, you may be able to claim tax relief on the remaining 15p per mile, subject to the relevant rules.
What About Self-Employed Individuals?
Self-employed individuals may also use HMRC’s simplified mileage rates instead of claiming the actual running costs of their vehicle.
The new 55p rate also applies to the simplified mileage method for cars and vans.
However, once you choose how to claim vehicle expenses for a particular vehicle, you cannot normally switch between the mileage method and actual running costs for that same vehicle.
Example
An employee drives 8,000 business miles during the tax year.
Before 6 April 2026
8,000 × 45p = £3,600
From 6 April 2026
8,000 × 55p = £4,400
This means an additional £800 can be reimbursed tax-free, or claimed as allowable mileage where the rules permit.
What Counts as Business Mileage?
Business mileage generally includes:
- Travel between workplaces.
- Client and customer visits.
- Journeys to temporary workplaces.
It does not normally include:
- Ordinary commuting between your home and your permanent workplace.
- Personal journeys.
Keeping accurate mileage records remains essential to support any claim.
How Business Management Consultation Can Help
At Business Management Consultation, we can help you:
- Review employee and director mileage claims.
- Ensure compliance with HMRC rules.
- Calculate the correct mileage reimbursement.
- Review self-employed mileage claims.
- Update payroll and expense systems to reflect the new rates.
Taking advantage of the increased mileage rates can help ensure you receive the full tax relief available.
Conclusion
The increase in the approved mileage rate to 55p per mile is welcome news for employees, directors and many self-employed individuals who regularly use their own vehicles for business travel. Whether you reimburse staff or claim mileage yourself, it’s important to ensure your systems and claims reflect the new rates from 6 April 2026.
Call us today on 01273 777 333 to discuss how the new HMRC mileage rates apply to your business or personal tax position.
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