United Kingdom
HMRC mileage allowance calculator for 2026/27
For 2026/27, HMRC's approved mileage rate for your own car or van is 55p a mile for the first 10,000 business miles and 25p a mile above that, backdated to 6 April 2026. The same rates apply to an electric car you own and to self-employed simplified expenses. A fully electric company car uses the Advisory Electricity Rate: 7p a mile for home charging and 15p for public charging from 1 September 2026.
Updated on
Estimate your mileage allowance
Enter a distance to see the estimate.
No official rate exists for this choice.
Estimated tax-free approved amount
£6,000.00
Calculation by mileage band
- Up to 10,000 mi10,000 mi × 0.55 £5,500.00
- Over 10,000 mi2,000 mi × 0.25 £500.00
HMRC rate period From 6 April 2026
HMRC mileage rates and calculation rules for 2026/27
Approved Mileage Allowance Payments (your own car or van)
An employer can pay you tax-free mileage up to the approved amount when you use your own vehicle for business journeys. Section 2 of the Taxation (Energy and Vehicles) Act 2026 raised the car and van rate for the first 10,000 business miles from 45p to 55p, for 2026/27 and later tax years, with effect from 6 April 2026. Miles above 10,000 stay at 25p. HMRC's policy paper says the government will set out its review of rates beyond 2026/27 at Budget 2026 on 28 October 2026.
Formula
Approved amount = 55p x business miles up to 10,000 + 25p x business miles above 10,000 (2026/27). From 2011/12 to 2025/26 the first 10,000 miles used 45p. Motorcycles: 24p x business miles. Bicycles: 20p x business miles. Passengers: up to 5p x passengers x business miles.
| Tax year | Cars and vans, first 10,000 business miles | Above 10,000 miles | Motorcycles | Bicycles | Per passenger per business mile |
|---|---|---|---|---|---|
| 2026/27 (from 6 April 2026) | 55p | 25p | 24p | 20p | 5p |
| 2011/12 to 2025/26 | 45p | 25p | 24p | 20p | 5p |
Conditions
- Applies to employees and directors who use their own car or van for business journeys. A fully electric company car uses the Advisory Electricity Rate.
- The 10,000-mile threshold applies per employee and per tax year (6 April to 5 April), with the business miles of all their cars and vans added together.
- Commuting between home and a permanent workplace is private and earns no allowance. Travel to a temporary workplace counts as business.
- Payments above the approved amount are taxable pay reported on the P11D. If your employer pays less, you can claim Mileage Allowance Relief on the difference.
- Carrying fellow employees on their own work journeys allows an extra payment of up to 5p per passenger per business mile, free of tax and National Insurance.
- Electric and hybrid cars belong to the car and van category (EIM31240), so a Tesla you own earns 55p and 25p. No separate electricity rate applies to a car you own.
Official sources
- Expenses and benefits: business travel mileage for employees' own vehicles (rules for tax) GOV.UK (HMRC)
- EIM31240: statutory mileage rates, kinds of vehicle HMRC
- Taxation (Energy and Vehicles) Act 2026, section 2 legislation.gov.uk
- Increasing mileage rates (policy paper, 17 June 2026) HMRC
- Travel: mileage and fuel rates and allowances GOV.UK (HMRC)
- Mileage Allowance Payments (480: Appendix 3) GOV.UK (HMRC)
Mileage Allowance Relief (employer pays less than the approved amount)
When your employer pays less than the approved amount, or nothing, you can claim tax relief on the gap. The relief reduces your taxable income, so the tax you save equals the gap multiplied by your marginal rate of income tax. Claims go through HMRC's tax relief service or your Self Assessment return, for the current tax year and the 4 previous tax years.
Formula
Mileage Allowance Relief = approved amount minus mileage payments received (when positive). Tax saved = relief x your marginal rate. Taxable excess = mileage payments received minus approved amount (when positive), reported on the P11D.
| Worked example (own car, 2026/27) | Amount |
|---|---|
| Approved amount for 12,000 business miles: 10,000 x 55p + 2,000 x 25p | £6,000 |
| Employer pays 45p x 12,000 miles | £5,400 |
| Mileage Allowance Relief | £600 |
| Tax saved at 20% / at 40% | £120 / £240 |
Conditions
- Your mileage log must give the reason for every business journey and the postcodes where it started and ended.
- Only business journeys in your own vehicle qualify. Commuting to a permanent workplace is excluded.
- Mileage Allowance Relief gives no National Insurance refund.
Official sources
National Insurance on mileage payments (employers)
For National Insurance, the qualifying amount uses a single rate for every business mile, with no 10,000-mile band: 55p from 6 April 2026 and 45p before. Mileage or car allowance payments above that amount are Class 1 earnings. HMRC's August 2026 Employer Bulletin confirms the 55p rate is backdated to 6 April 2026, and employers can correct through payroll the tax or National Insurance deducted on payments between 45p and 55p.
Formula
National Insurance-free amount = 55p x all business miles in the earnings period (45p before 6 April 2026). Class 1 National Insurance applies to motoring payments above it.
Conditions
- Paying the employee less than the qualifying amount gives no National Insurance relief.
Official sources
Simplified expenses for the self-employed (flat rate per business mile)
Sole traders and partnerships made up of individuals can claim a flat rate per business mile for a car or goods vehicle. From 6 April 2026 the rate is 55p for the first 10,000 business miles and 25p above, the same figures as for employees. GOV.UK gives the example of 11,000 business miles in 2026/27: 10,000 x 55p + 1,000 x 25p = £5,750.
Formula
Deduction = 55p x business miles up to 10,000 + 25p x business miles above 10,000 (from 6 April 2026; 45p for the first 10,000 miles before that date). Motorcycles: 24p x business miles.
| Period | Cars and goods vehicles, first 10,000 business miles | Above 10,000 miles | Motorcycles |
|---|---|---|---|
| From 6 April 2026 (2026/27) | 55p | 25p | 24p |
| 6 April 2013 to 5 April 2026 | 45p | 25p | 24p |
Conditions
- Limited companies and partnerships with a company partner cannot use the scheme. Bicycles are outside it.
- A vehicle that has already received capital allowances cannot switch to the flat rate.
- Once you use the flat rate for a vehicle, you keep using it for as long as that vehicle stays in the business.
- The 10,000 miles count all business journeys in the period for which your trade profits are calculated.
- Charging an electric car is covered by the flat rate. Parking, tolls and train fares can be claimed on top.
Official sources
- Simplified expenses if you're self-employed (vehicles) GOV.UK (HMRC)
- Income Tax (Trading and Other Income) Act 2005, section 94F legislation.gov.uk
Advisory Electricity Rate (fully electric company car)
HMRC's Advisory Electricity Rate sets the tax-free amount an employer can pay per business mile in a fully electric company car, and the amount an employee can repay for private electricity. From 1 September 2026 it is 7p a mile for home charging and 15p a mile for public charging, unchanged since 1 March 2026. HMRC reviews the rates on 1 March, 1 June, 1 September and 1 December, and the next review falls on 1 December 2026. The September 2026 figures assume 3.59 miles per kWh, 24.47p per kWh at home and 54.00p per kWh at public chargers under 50 kW.
Formula
Tax-free reimbursement = business miles x rate in force on the journey date for the charging location. Mixed charging: business miles x (home share x 7p + public share x 15p). Example: 1,000 business miles in October 2026 give £70 charged at home or £150 at public chargers.
| From | To | Home charging | Public charging |
|---|---|---|---|
| 1 September 2024 | 31 August 2025 | 7p (single rate) | 7p (single rate) |
| 1 September 2025 | 30 November 2025 | 8p | 14p |
| 1 December 2025 | 28 February 2026 | 7p | 14p |
| 1 March 2026 | 31 May 2026 | 7p | 15p |
| 1 June 2026 | 31 August 2026 | 7p | 15p |
| 1 September 2026 | Next review on 1 December 2026 | 7p | 15p |
Conditions
- Applies to fully electric company cars. Hybrid company cars use the petrol or diesel advisory fuel rates, and an electric car you own uses the approved mileage rates of 55p and 25p.
- Employers may keep using the previous rates for up to one month after new rates apply.
- Mileage charged partly at home and partly at public chargers can be apportioned on a fair and reasonable basis.
- A higher rate per mile stays tax-free only when the employer can show the higher cost per mile.
Official sources
Company car benefit for a fully electric car
A company car available for private use is a taxable benefit. For a car with zero CO2 emissions, such as a Tesla, the appropriate percentage is 4% in 2026/27, then 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. The employee pays income tax on the cash equivalent at their marginal rate and the employer pays Class 1A National Insurance. Business mileage does not change the benefit.
Formula
Cash equivalent = list price for tax (with accessories) x appropriate percentage x days available / days in the tax year, minus required payments for private use. Income tax = cash equivalent x marginal rate.
| Tax year | Appropriate percentage (0 g/km CO2) |
|---|---|
| 2025/26 | 3% |
| 2026/27 | 4% |
| 2027/28 | 5% |
| 2028/29 | 7% |
| 2029/30 | 9% |
Conditions
- Electricity is not a fuel for the benefit rules, so a fully electric company car carries no car fuel benefit charge.
- Employer-paid charging at work, at a home charge point or with a public charge card creates no further benefit for a company car.
- Payrolling of company car, car fuel, van, van fuel and medical benefits becomes mandatory from 6 April 2027. Most other benefits follow from April 2028.
Official sources
- Work out the appropriate percentage for company car benefits (480: Appendix 2) GOV.UK (HMRC)
- Company car tax: CO2 emissions tables of rates GOV.UK (HMRC)
- Taxation of company cars: appropriate percentage for 2028 to 2029 and 2029 to 2030 HMRC
- EIM23900: car benefit, issues relating to electric cars HMRC
- June 2026 Employer Bulletin (mandatory payrolling of benefits) HMRC
Mileage records and how long to keep them
Mileage payments, Mileage Allowance Relief, simplified expenses and the Advisory Electricity Rate depend on business miles, so every claim rests on a log of business journeys. For each journey, record the date, the reason, the start and end postcodes and the distance. HMRC asks for the reason and the postcodes when an employee claims Mileage Allowance Relief. Keep the records for the longest period that applies to you.
| Who | Minimum retention |
|---|---|
| Self-employed (Self Assessment) | 5 years after the 31 January filing deadline |
| Employers (PAYE, taxable expenses and benefits) | 3 years from the end of the tax year |
| Limited companies | 6 years from the end of the financial year |
| VAT-registered businesses | 6 years |
Conditions
- For a 2026/27 return filed by 31 January 2028, a sole trader keeps records until at least 31 January 2033.
Official sources
- Claim tax relief for your job expenses: vehicles you use for work GOV.UK (HMRC)
- Business records if you're self-employed: how long to keep your records GOV.UK
- PAYE and payroll for employers: keeping records GOV.UK
- Running a limited company: company and accounting records GOV.UK
- Record keeping for VAT (VAT Notice 700/21) HMRC
Frequently asked questions
How do I calculate my HMRC mileage allowance for 2026/27?
Multiply your business miles up to 10,000 by 55p and any miles above 10,000 by 25p. For 12,000 business miles in your own car, that gives 10,000 x 55p + 2,000 x 25p = £6,000. At the 2025/26 rate of 45p, the same mileage gave £5,000.
Can I claim 55p a mile for an electric car?
Yes, when the car is your own. HMRC puts electric and hybrid cars in the car and van category, so a Tesla you own earns 55p for the first 10,000 business miles and 25p above. A fully electric company car uses the Advisory Electricity Rate: 7p a mile for home charging and 15p for public charging from 1 September 2026.
Is the 55p mileage rate backdated?
The increase from 45p to 55p took effect on 6 April 2026, so it covers the whole 2026/27 tax year. HMRC's August 2026 Employer Bulletin tells employers that tax or National Insurance deducted on payments between 45p and 55p can be corrected through payroll.
What can I do if my employer pays less than 55p a mile?
Claim Mileage Allowance Relief on the difference through HMRC's tax relief service or your Self Assessment return. If your employer pays 45p on 12,000 business miles (£5,400) against an approved amount of £6,000, the relief is £600, worth £120 in tax at 20% or £240 at 40%. Claims can cover the current tax year and the 4 previous ones.
Does the 10,000-mile threshold apply per car?
No. The threshold applies per employee and per tax year, with the business miles of all their cars and vans added together. Self-employed simplified expenses count all business journeys in the period for which trade profits are calculated.