Mileage tax relief: the 55p rule explained

Use your own vehicle for work journeys and HMRC lets a fixed amount per mile escape tax — 55p for cars from 2026/27 (45p for earlier years), more than most employers ever pay. The gap between what HMRC allows and what your employer paid you is a claimable relief, and it reaches back four tax years. This is the complete ruleset, with the arithmetic shown honestly — because adverts for this relief routinely overstate it by a factor of five.

The approved mileage rates

The car and van rate rose from 45p to 55p on 6 April 2026 (announced 21 May 2026) — the first change since 2011. If your employer reimbursed you at 45p earlier this tax year, you may be due extra relief.

Vehicle	First 10,000 business miles (per year)	After 10,000 miles
Car or van (2026/27 onwards)	55p	25p
Car or van (2011/12 to 2025/26)	45p	25p
Motorcycle	24p (all miles)	24p
Bicycle	20p (all miles)	20p

These are HMRC's Approved Mileage Allowance Payments. They're deliberately generous — meant to cover fuel, insurance, servicing, depreciation, everything — which is why the scheme requires no receipts for costs, only evidence of journeys.

The journey test: business yes, commuting no

One rule settles almost every question: travel to somewhere you have to be for work counts; getting to your normal workplace doesn't.

Counts:

• Driving between two work sites during the day
• Visiting clients, suppliers, patients, courses or conferences
• A temporary workplace — one you attend for under 24 months

Doesn't count:

• Home to your permanent office or depot, however far
• Detours that are really your commute with a stop
• Any journey in a company car (different system: advisory fuel rates)
• Passenger-related rules aside, carrying a colleague adds 5p a mile in approved payments, but isn't part of the standard relief calculation

For armed forces postings the same 24-month temporary-duty logic applies — our MOD mileage page covers the specifics.

The honest arithmetic

Say you drove 6,000 business miles in 2026/27 and your employer paid nothing:

1. Approved amount: 6,000 × 55p = £3,300
2. Employer paid: £0
3. Shortfall eligible for relief: £3,300
4. What you actually receive — the tax on the shortfall:
   • Basic rate (20%): £660
   • Higher rate (40%): £1,320

Now the same miles with an employer paying 20p a mile (£1,200): the shortfall is £2,100, worth £420 at basic rate. This is the figure that surprises people who saw "£3,300 back!" in an advert — you never receive the approved amount, you receive its tax.

Evidence: the log HMRC may ask to see

Mileage relief is enquiry-friendly — it's the expense HMRC challenges most. A contemporaneous log makes the claim untouchable:

• Date and purpose of each journey
• Start and end points (postcodes are ideal)
• Miles driven per journey, with period totals
• Anything your employer reimbursed, dates matched

A notes-app habit or a simple spreadsheet is enough; reconstructing three years of journeys from memory is what fails enquiries.

Four years back — and via which form

• Form P87 (online or post) for employee claims under £2,500 a year — the route for most people
• Self Assessment if you already file, or the claim is over £2,500
• Armed forces claims follow the same P87 mechanics

Claims for earlier years arrive as a lump sum; going forward, HMRC often codes the relief into your monthly payslip.

The company car, the hybrid, and other edge cases

• Company car users: no AMAP. Employers reimburse via advisory fuel rates that move with pump prices: check the latest on GOV.UK.
• Hybrid workers driving to an office they attend part-time: commuting is still commuting unless the office ceased to be your permanent workplace.
• Volunteers: may receive the same approved rates tax-free from their organisation; relief mechanics differ — ask the charity's treasurer.

Common mistakes that void claims

• Including commuting miles — the single most common error
• Claiming the approved amount as the refund in your head, then resenting HMRC for your own misunderstanding
• Double-claiming miles your employer already reimbursed at the full rate
• Estimating mileage in round thousands with no log and no pattern — an enquiry magnet