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For the first time since 2011, HMRC has increased the Approved Mileage Allowance Payment (AMAP) rate for employees and self-employed individuals using their own vehicle for business travel.
From 6 April 2026, the approved rate for the first 10,000 business miles in a tax year rises from 45p to 55p per mile for cars and vans. The rate for mileage above 10,000 miles remains at 25p per mile, and rates for motorcycles and bicycles are unchanged.
The increase is long overdue. The 45p rate had been in place for 15 years, a period that saw fuel prices, insurance premiums and vehicle running costs rise considerably. Many employees who use their own car for work will have been bearing the gap between what their employer reimburses and what it actually costs them to drive.
The new 55p rate applies regardless of fuel type – petrol, diesel, hybrid or electric – since HMRC’s mileage system is designed to reflect overall motoring costs rather than fuel expenditure alone.
For businesses, the change is a prompt to review mileage reimbursement policies and update payroll and expenses systems for the 2026/27 tax year. Employers who have been reimbursing below the HMRC approved rate should note that employees may be entitled to claim Mileage Allowance Relief on the shortfall. Claims can also be backdated to April, which is particularly relevant for those making quarterly submissions under Making Tax Digital.
The AMAP rate applies specifically to employees and self-employed individuals using their own vehicle — it is distinct from the tax treatment of company-owned cars and vans, which involves a different set of rules around benefit-in-kind charges, capital allowances and fuel benefits. For a full guide to those considerations, read our article Tax and the Company Car (or Van!).
For further advice on how the new rate affects your business, payroll or expense policies, please get in touch with our team on 0330 058 6559 or email hello@scruttonbland.co.uk.
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