Following the Chancellor’s announcement on 21 May 2026, the Government has confirmed an increase to the approved mileage rates for cars and vans. The rate has been increased to 55p per mile for the first 10,000 business miles travelled in a tax year, up from the previous rate of 45p, which had remained unchanged since 2011.
The change is effective retrospectively from 6 April 2026 and will apply for the full 2026/27 tax year.
This increase applies only to cars and vans, and only to the first 10,000 miles. The rate for mileage in excess of 10,000 miles remains unchanged at 25p per mile.
The revised rate applies to:
- Approved Mileage Allowance Payments (AMAPs) – Being the HMRC approved rates employers can pay employees tax-free when they use their own vehicle for business travel.
- Mileage Allowance Relief (MAR) – Being the tax relief employees can claim from HMRC where their employer pays less than the approved mileage rates.
- Self-employed mileage – Being the simplified mileage method that sole traders and partners can use to calculate allowable business travel expenses.
Mileage rates for other vehicle types are unaffected. For business travel, these remain at a flat rate being:
- 24p per mile for motorcycles
- 20p per mile for bicycles
If you have any questions about how the revised mileage rates affect you or your business, or would like further guidance, contact our tax team today.
