Mileage Allowance Calculator UK 2026/27 — HMRC Approved Rates & Tax Relief
If you use your own car for work, your employer can pay up to 45p per mile (first 10,000 miles) tax-free. If they pay less — or nothing — you can claim Mileage Allowance Relief (MAR) from HMRC and get tax back. This calculator works out exactly what you should receive and how much tax relief you can claim.
HMRC AMAP rates 2026/27: cars/vans 45p (first 10,000 miles) then 25p; motorcycles 24p; bicycles 20p. Passenger supplement: 5p/mile per passenger. Claim MAR via self-assessment or Form P87. Can backdate 4 years. Employer overpayments above approved rates are taxable.
HMRC Approved Mileage Rates 2026/27
| Vehicle | First 10,000 miles | Over 10,000 miles |
|---|---|---|
| Car or van | 45p per mile | 25p per mile |
| Motorcycle | 24p per mile | 24p per mile |
| Bicycle | 20p per mile | 20p per mile |
In addition, if you carry fellow employees in your own car on business journeys, you can claim an additional 5p per mile per passenger. Your passengers can also claim their share of the journey if their employer does not reimburse them.
Why the Approved Rates Feel Low
The HMRC approved rates have been unchanged since April 2011. Since then, fuel prices, insurance, servicing, and the overall cost of running a car have all risen substantially. Many motoring organisations estimate the true cost per mile of running an average car is now 60–80p or more. The mismatch means that employees using their own cars for work are often subsidising their employers’ business costs — which is why claiming every penny of Mileage Allowance Relief available is important.
Claiming Mileage Allowance Relief (MAR)
If your employer pays less than the approved rate (or nothing), you can claim MAR. There are two routes:
- Self-assessment tax return — if you already complete a return, claim MAR in the employment pages. The relief reduces your taxable pay for the year.
- Form P87 — if you do not complete a self-assessment return, use HMRC’s P87 form (available at gov.uk) to claim relief for up to 4 previous tax years. Submit online or by post. HMRC normally processes within 8–12 weeks and pays a refund or adjusts your tax code.
Keep a mileage log. HMRC can ask for evidence of your business miles — your log should record the date, destination, reason for the journey, and miles travelled. A simple spreadsheet or app will do.
What Counts as a "Business Mile"
Business mileage covers journeys made for work purposes, but it's worth knowing exactly where the line sits, since HMRC's definition doesn't always match everyday assumptions. Ordinary commuting — travelling from home to your normal, permanent workplace — never counts as business mileage, even if you use your own car and even if there's no other way to get there. Journeys to a temporary workplace do count, provided you're not expected to work there for more than 24 months, or the assignment isn't expected from the outset to last that long. Travel between two different workplaces during the same working day, visits to clients or sites away from your normal base, and trips to training courses or meetings away from your usual workplace are all typically classed as business mileage. If your journey from home is actually shorter than your usual commute (for example, visiting a client near your house rather than travelling into your normal office), HMRC generally only allows you to claim the mileage beyond what your normal commute would have cost.
What Happens to Unused Mileage Allowance Relief
Mileage Allowance Relief works by comparing what your employer actually paid you per mile against the HMRC-approved rate, and if your employer paid less (including nothing at all), you can claim tax relief on the shortfall. This relief reduces your taxable income for the year, rather than being paid to you as a direct cash refund of the full shortfall — so a basic-rate taxpayer effectively gets back 20% of the unclaimed mileage relief as a reduction in tax owed, while a higher-rate taxpayer gets back 40%. If you forget to claim MAR in a particular tax year, you can generally still claim it retrospectively for up to four previous tax years using form P87 or an amended Self Assessment return, so it's worth checking your mileage records against what you were actually paid for recent years if you've never claimed before.
Frequently Asked Questions
Yes — a flat car allowance is different from a mileage allowance. If you receive a flat monthly car allowance (e.g. £300/month) and also drive business miles in your own car, you can still claim MAR on the business miles driven. The car allowance itself is taxable as salary; the mileage relief is separate. Many employees with car allowances miss this claim entirely.
HMRC requires you to keep a mileage log showing for each journey: the date; start and end location; purpose of the trip; and number of miles. You do not need fuel receipts for the approved rate claim (you are not claiming actual fuel costs). Various apps automatically log journeys using GPS — these are acceptable records. Keep records for at least 6 years after the tax year in question.
The approved mileage rates covered here apply specifically to using your own personal vehicle for business journeys. If you drive a company car instead, a different system applies — you can claim back the cost of fuel used for business trips at HMRC's separate Advisory Fuel Rates, which are lower than the approved mileage rates because they only cover fuel, not the wear, insurance, and depreciation costs that the standard mileage rate is designed to compensate for.
Yes, HMRC sets separate approved rates for motorcycles and bicycles used for business journeys, both lower than the car rate, reflecting their lower running costs. Unlike cars, the motorcycle and bicycle rates don't reduce after 10,000 miles in a tax year — they stay flat regardless of how many business miles you accumulate, which is a helpful simplification if you cycle or ride a motorbike extensively for work.