tmcmatchHMRC mileage rates 2026/27: 55p a mile, and what changed
From the 2026–27 tax year the approved mileage rate for cars and vans is 55p a mile for the first 10,000 business miles. It had been 45p since 2011–12. The rate after 10,000 miles, and the motor cycle and bicycle rates, did not change. This page quotes the statute that sets them and the HMRC table that publishes them.
Key points
- Cars and vans: 55p a mile for the first 10,000 business miles, 25p after — s.230(2) ITEPA 2003, from 2026–27.
- Motor cycles 24p, bicycles 20p, flat, with no 10,000-mile step.
- Passengers: 5p per passenger per business mile, for fellow employees on work journeys.
- Paid under the rate? The employee can claim the difference as mileage allowance relief (s.231).
- These rates are for the employee’s own vehicle. Company cars use advisory fuel rates instead.
The phrases people search for, and what the legislation says
| What people search for | What it actually is | What it decides |
|---|---|---|
| “HMRC mileage rate” | The approved amount for mileage allowance payments, set per kind of vehicle in s.230(2) ITEPA 2003. | The most an employer can pay per business mile without it being taxable. |
| “45p a mile” | The car and van rate for the first 10,000 miles from 2011–12 to 2025–26. | Out of date. From 2026–27 it is 55p. Any policy still saying 45p is paying below the ceiling or quoting the old law. |
| “55p a mile” | The car and van rate for the first 10,000 business miles from 2026–27, in s.230(2) as amended. | The current ceiling. Paying up to it is tax-free for the employee. |
| “25p after 10,000 miles” | The car and van rate for each business mile over 10,000 in the tax year (s.230(2)). | Unchanged. The 10,000 counts all business miles across the employment and any associated employment (s.230(3)). |
| “Mileage allowance” | Mileage allowance payments: amounts paid to an employee for using their own vehicle for business travel (s.229(2)). | Only for the employee’s own vehicle. Company cars use advisory fuel rates instead. |
| “Mileage allowance relief” | The difference between what the employer paid and the approved amount, where the employer paid less (s.231(2)). | What an employee can claim back from HMRC when the employer pays under the ceiling. |
| “Passenger rate” | 5p per passenger per business mile for carrying fellow employees on journeys that are work journeys for them. | Only payments specifically for passengers count, and there is no relief if nothing is paid. |
| “Motorbike mileage rate” | 24p a mile, flat, whatever the mileage (s.230(2)). | No 10,000-mile step for motor cycles. |
| “Bicycle mileage rate” | 20p a mile, flat (s.230(2)). | Also no 10,000-mile step. |
| “Electric car mileage rate” | For the employee’s own electric car: the same car and van rate as any other car. For a company electric car: the advisory electric rate, which is a different regime. | Whose car it is decides which table applies, not the fuel. |
| “Company car mileage rate” | Advisory fuel rates — set by HMRC by engine size and fuel, reviewed quarterly. | A separate page, because it is a separate rule. The approved mileage rates do not apply to company vehicles (s.229(4)). |
| “Business mileage” | Business travel as defined by ss.337–339 — not ordinary commuting to a permanent workplace. | Whether a mile counts at all. The rate is irrelevant if the journey is commuting. |
The rates, as HMRC publishes them
From the 2026 to 2027 tax year
| Vehicle type | First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year |
|---|---|---|
| Cars and vans | 55p | 25p |
| Motor cycles | 24p | 24p |
| Bicycles | 20p | 20p |
From 2011 to 2026 — the rates they replaced
| Vehicle type | First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year |
|---|---|---|
| Cars and vans | 45p | 25p |
| Motor cycles | 24p | 24p |
| Bicycles | 20p | 20p |
Only one cell moved: cars and vans, first 10,000 miles, 45p to 55p. Everything else in the table is as it was.
Where the 55p comes from
The rates are statutory. Section 230(2) of the Income Tax (Earnings and Pensions) Act 2003 sets them, and legislation.gov.uk annotates the change in these words:
Sum in s. 230(2) substituted (with effect for the tax year 2026-27 and subsequent tax years) by Taxation (Energy and Vehicles) Act 2026 (c. 26), s. 2(1)(a)(3)Read s.230 on legislation.gov.uk
That matters for one reason. A policy, a payroll setting or an expenses tool configured at 45p is not “using the HMRC rate” any more — it is paying below the ceiling, which is lawful but leaves the employee with a relief claim to make.
How the exemption works
Tax-free up to the approved amount
No liability to income tax arises in respect of approved mileage allowance payments for a vehicle to which this Chapter appliesRead it on legislation.gov.uk
And the test for “approved” is a cap across the year, not a per-trip rule:
Mileage allowance payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee for the kind of vehicle in question does not exceed the approved amount for such payments applicable to that kind of vehicleRead it on legislation.gov.uk
So an employer can pay any rate it likes. The part up to the approved amount is tax-free; the part above it is earnings.
The 10,000 miles is shared across associated employments
Section 230(3) defines the first 10,000 miles as “the total number of miles of business travel in relation to the employment, or any associated employment, by car or van in the tax year in question”. An employee with two roles in the same group does not get two lots of 10,000 miles at the higher rate.
Mileage allowance relief when the employer pays less
Where the payments for the year fall short of the approved amount, s.231 gives the employee a relief of “the difference between—(a) the total amount of all mileage allowance payments, if any, made to the employee for the kind of vehicle in question, and (b) the approved amount for such payments applicable to that kind of vehicle”, and s.232 allows it as a deduction from earnings. An employer that pays nothing still leaves the employee entitled to relief on the whole approved amount for their business miles.
What the exemption does not cover
Section 229(4) takes two cases out: where “the employee is a passenger in the vehicle, or (b) the vehicle is a company vehicle”. Passengers have their own rate, and company vehicles have their own regime.
Carrying colleagues: the passenger rate
HMRC’s published rate is “5p per passenger per business mile for carrying fellow employees in a car or van on journeys which are also work journeys for them. Only payments specifically for carrying passengers count and there is no relief if you receive less than 5p or nothing at all.”
Two consequences worth putting in a travel policy. The payment has to be made specifically for the passenger — a higher rate for the driver does not count. And there is no relief to claim if the employer pays nothing, which is different from the driver’s position under s.231.
The company-vehicle figures on the same HMRC page
HMRC publishes three company-vehicle figures alongside the mileage rates. They are benefit-in-kind figures rather than mileage rates, but they are what an employer with a mixed fleet needs next.
Company van benefit charge
| Tax year | Amount |
|---|---|
| 2026 to 2027 | £4,170 |
| 2025 to 2026 | £4,020 |
| 2024 to 2025 | £3,960 |
| 2023 to 2024 | £3,960 |
| 2022 to 2023 | £3,600 |
| 2021 to 2022 | £3,500 |
| 2020 to 2021 | £3,490 |
| 2019 to 2020 | £3,430 |
| 2018 to 2019 | £3,350 |
| 2017 to 2018 | £3,230 |
| 2016 to 2017 | £3,170 |
| 2015 to 2016 | £3,150 |
Car fuel benefit multiplier
| Tax year | Amount |
|---|---|
| 2026 to 2027 | £29,200 |
| 2025 to 2026 | £28,200 |
| 2024 to 2025 | £27,800 |
| 2023 to 2024 | £27,800 |
| 2022 to 2023 | £25,300 |
| 2021 to 2022 | £24,600 |
| 2020 to 2021 | £24,500 |
| 2019 to 2020 | £24,100 |
| 2018 to 2019 | £23,400 |
| 2017 to 2018 | £22,600 |
| 2016 to 2017 | £22,200 |
| 2015 to 2016 | £22,100 |
Van fuel charge
| Tax year | Amount |
|---|---|
| 2026 to 2027 | £798 |
| 2025 to 2026 | £769 |
| 2024 to 2025 | £757 |
| 2023 to 2024 | £757 |
| 2022 to 2023 | £688 |
| 2021 to 2022 | £669 |
| 2020 to 2021 | £666 |
| 2019 to 2020 | £655 |
| 2018 to 2019 | £633 |
| 2017 to 2018 | £610 |
| 2016 to 2017 | £598 |
| 2015 to 2016 | £594 |
We are paid a fixed fee per enquiry, agreed in advance, identical whichever supplier receives it. Mileage is here because it is the part of business travel that most often happens outside any booking channel — nobody books a drive to a client — and a travel programme that ignores it has left a cost line unmanaged.
Want car travel inside the programme rather than outside it?
Describe the requirement once. It goes to no more than three suppliers, once each.
What to put in the travel policy
- State the rate you pay, and say whether it is the approved amount. If you pay the ceiling, write 55p and 25p, not “the HMRC rate” — the last policy that said “the HMRC rate” meant 45p.
- Say whose car it is. Own car: these rates. Company car: advisory fuel rates.
- Define business mileage by reference to commuting, because that is where claims fail. Sections 337 to 339.
- Say whether you pay the passenger rate. If you do not, there is no relief for the passenger.
The full set of clauses a policy can make enforceable is on corporate travel policy, and the cost lines that sit outside a travel supplier’s quote are on what it costs.
This page describes how the legislation and HMRC’s published rates are written. Whether a particular journey is business travel is a question of fact, and nothing here is tax advice.
Common questions
What is the HMRC mileage rate for 2026/27?
55p a mile for the first 10,000 business miles in a car or van, and 25p a mile after that. Motor cycles are 24p and bicycles 20p, with no 10,000-mile step. The car and van figure is set in s.230(2) of the Income Tax (Earnings and Pensions) Act 2003, which was amended with effect for 2026–27 onwards.
Has the 45p mileage rate gone up?
Yes. HMRC’s published table shows 45p for the tax years 2011 to 2026 and 55p from 2026 to 2027. On legislation.gov.uk the change is annotated as the sum in s.230(2) being substituted, with effect for the tax year 2026–27 and subsequent tax years, by the Taxation (Energy and Vehicles) Act 2026. The rate after 10,000 miles stayed at 25p.
Is mileage allowance taxable?
Not up to the approved amount. Section 229(1) says no liability to income tax arises in respect of approved mileage allowance payments, and s.229(3) makes a payment approved to the extent that the total paid for that kind of vehicle in the tax year does not exceed the approved amount. Any excess over the approved amount is taxable.
What if my employer pays less than 55p?
You can claim mileage allowance relief for the difference. Section 231(2) sets the relief as the difference between what was paid and the approved amount, and s.232 allows it as a deduction. If nothing at all is paid, the relief is the whole approved amount for your business miles.
Does the 10,000 miles reset for each job?
Not across associated employments. Section 230(3) says the first 10,000 miles is the total number of miles of business travel in relation to the employment, or any associated employment, by car or van in the tax year. Associated employments are defined in s.230(4) and include the same employer and associated companies.
Can I use the mileage rates for a company car?
No. Section 229(4) disapplies the mileage allowance exemption where the vehicle is a company vehicle. Company cars use HMRC’s advisory fuel rates, which are set by engine size and fuel type and reviewed quarterly.
What is the passenger rate?
5p per passenger per business mile for carrying fellow employees in a car or van on journeys that are also work journeys for them. HMRC’s guidance adds that only payments specifically for carrying passengers count and that there is no relief if you receive less than 5p or nothing at all.
Does the mileage rate apply to commuting?
No. The rates apply to business travel, and ordinary commuting between home and a permanent workplace is not business travel under s.338 of the same Act. A long assignment can also turn from business travel into commuting under the 24 month rule in s.339(5).
Sources cited on this page
- Income Tax (Earnings and Pensions) Act 2003, s.229 — mileage allowance payments
- Income Tax (Earnings and Pensions) Act 2003, s.230 — the approved amount
- Income Tax (Earnings and Pensions) Act 2003, s.231 — mileage allowance relief
- Income Tax (Earnings and Pensions) Act 2003, s.232 — giving effect to the relief
- HMRC — Travel: mileage and fuel rates and allowances
- HMRC — Advisory fuel rates
- Income Tax (Earnings and Pensions) Act 2003, s.338 — ordinary commuting
Every figure above was read from the source it is attributed to on 20 September 2026. How we check this.
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