What is HMRC mileage allowance?

HMRC mileage allowance (also called approved mileage rates or Mileage Allowance Payments, MAPs) is the tax-free rate employers can pay employees for business travel in their own vehicle. If your employer pays at or below these rates, you pay no tax on the payment. If they pay above these rates, you pay tax on the excess. If they pay below (or nothing), you can claim tax relief on the difference.

Current HMRC mileage rates

The approved mileage rates for 2025-26 are:

Vehicle type First 10,000 miles Over 10,000 miles
Cars and vans 45p per mile 25p per mile
Motorcycles 24p per mile 24p per mile
Bicycles 20p per mile 20p per mile

These rates have not changed since 2011 (cars) and 2002 (motorcycles and bicycles).

What counts as business mileage?

You can claim mileage for:

  • Travel between work sites: Office to warehouse, or one client site to another
  • Client or customer visits: Driving to a client's office or home
  • Temporary workplaces: Travel to a site you work at for less than 24 months
  • Training courses or conferences: If required for your job

You cannot claim for:

  • Commuting: Your regular journey from home to your permanent workplace
  • Personal journeys: Shopping, holidays, visiting friends
  • Permanent workplace travel: Once you work at a location for 24 months or more, it becomes a permanent workplace and travel there is commuting

What is a permanent workplace?

A permanent workplace is a location where you:

  • Attend regularly for the performance of your duties, and
  • Expect to attend for more than 24 months, or
  • Have already attended for more than 24 months

Example 1: You work in an office 5 days a week. This is your permanent workplace. Travel from home to the office is commuting (not claimable).

Example 2: You are sent to work on a construction site for 18 months. This is a temporary workplace. Travel from home to the site is claimable.

Example 3: After 24 months at the construction site, it becomes a permanent workplace. Travel is no longer claimable.

How much can you claim?

You can claim the difference between what your employer pays and the HMRC approved rate.

Example 1: You drive 8,000 business miles in a tax year. Your employer pays 30p per mile (£2,400). The approved rate is 45p per mile (£3,600). You can claim tax relief on £1,200 (the difference). If you're a basic-rate taxpayer, your refund is £240 (20% of £1,200).

Example 2: You drive 12,000 business miles. Your employer pays nothing. You can claim:

  • First 10,000 miles: 10,000 × 45p = £4,500
  • Next 2,000 miles: 2,000 × 25p = £500
  • Total claim: £5,000

If you're a basic-rate taxpayer, your refund is £1,000 (20% of £5,000).

Mileage allowance for passengers

If you carry colleagues in your car for business travel, you can claim an extra 5p per mile per passenger. Your employer can pay this tax-free, or you can claim tax relief if they don't.

Example: You drive 100 miles to a conference with two colleagues. You can claim:

  • Driver: 100 miles × 45p = £45
  • Passengers: 100 miles × 2 passengers × 5p = £10
  • Total: £55

Electric vehicles and mileage allowance

Electric cars and vans use the same approved mileage rates as petrol and diesel vehicles: 45p per mile (first 10,000 miles), 25p per mile (over 10,000).

Some employers pay a higher rate for electric vehicles to reflect higher purchase costs. Any payment above 45p/25p per mile is taxable as a benefit-in-kind.

How to track business mileage

Keep a mileage log recording:

  • Date of journey
  • Start and end locations
  • Purpose of journey (client name, meeting reason)
  • Miles travelled

You do not need to send your log to HMRC with your claim, but you must keep it for at least 22 months after the end of the tax year in case HMRC queries your claim.

Use a spreadsheet, mileage tracking app, or paper logbook. Record journeys as soon as possible (memory fades quickly).

How to claim HMRC mileage allowance

If your employer does not reimburse mileage or pays below the approved rate, claim tax relief via:

1. Form P87

Fill in form P87 online via your HMRC Personal Tax Account or download a paper form. Enter:

  • Total business miles driven in the tax year
  • Amount your employer paid (if any)
  • The difference between approved rate and employer payment

HMRC processes online P87 claims in 5-10 working days. Paper claims take 4-8 weeks.

2. Self Assessment tax return

If you complete a Self Assessment return, include mileage claims in the "Employment" section under "Employment expenses". Enter the total mileage allowance you are claiming.

3. Via your employer

Some employers operate a system where you submit mileage claims monthly and they reimburse you tax-free up to the approved rate. No need to claim via HMRC if your employer pays the full 45p/25p rate.

Mileage allowance for company cars

If you drive a company car for business travel and pay for fuel yourself, you can claim:

  • Petrol/diesel cars: HMRC's Advisory Fuel Rates (AFRs), which vary by engine size and fuel type
  • Electric cars: 9p per mile (from March 2025)

You cannot claim the 45p/25p rate for a company car. That rate is for your own vehicle only.

Advisory Fuel Rates change quarterly. Check gov.uk for current rates.

Mileage allowance for self-employed

Self-employed people can use the same approved mileage rates to claim business travel costs as a business expense. Include mileage claims in your Self Assessment return under "Business expenses".

Alternatively, claim actual costs (fuel, insurance, MOT, repairs, depreciation) apportioned between business and private use. The simplified mileage rate is usually easier.

Do you need receipts to claim mileage?

You do not need fuel receipts to claim mileage at the approved rates. The 45p/25p rate covers all running costs (fuel, insurance, servicing, depreciation).

You must keep:

  • A mileage log showing dates, journeys, and miles
  • Evidence of the business purpose (diary entries, meeting invites, client correspondence)

Can you claim mileage and parking fees?

Yes. The approved mileage rate covers running costs (fuel, insurance, servicing) but not:

  • Parking fees
  • Tolls and congestion charges
  • Ferry or tunnel crossing fees

Claim these separately with receipts.

What if you use more than one vehicle?

The 10,000-mile threshold applies to you, not per vehicle. If you drive 6,000 miles in one car and 5,000 miles in another, you claim:

  • First 10,000 miles (combined): 10,000 × 45p = £4,500
  • Next 1,000 miles: 1,000 × 25p = £250
  • Total: £4,750

Mileage allowance calculator

Common mistakes

  • Claiming commuting: You cannot claim for travel from home to your permanent workplace.
  • No mileage log: HMRC can reject claims without a detailed log.
  • Mixing personal and business miles: Only claim business miles. HMRC may challenge inflated claims.
  • Claiming for company cars at 45p/25p rate: Company cars use Advisory Fuel Rates, not approved mileage rates.