UK Mileage Allowance Calculator
Calculate your HMRC approved mileage allowance, employer shortfall, and tax relief for 2025/26
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UK Mileage Allowance Calculator: Calculate Your HMRC AMAP Tax Relief for 2025/26
Understanding your mileage allowance entitlement is essential for any UK employee or self-employed individual who uses their personal vehicle for business travel. The Approved Mileage Allowance Payment (AMAP) system, established by HMRC, provides a standardised framework for tax-free reimbursement when you drive your own car, van, motorcycle, or bicycle for work purposes. Whether your employer pays you nothing, less than the approved rate, or you need to verify your calculations, this comprehensive guide and calculator will help you determine exactly what you are entitled to claim.
The AMAP rates have remained unchanged since 2011, with cars and vans eligible for 45 pence per mile for the first 10,000 business miles and 25 pence per mile thereafter. Motorcycles receive 24 pence per mile regardless of distance, whilst bicycles qualify for 20 pence per mile. These rates are designed to cover all running costs including fuel, insurance, road tax, MOT, servicing, depreciation, and general wear and tear. When your employer reimburses you at less than these approved rates, or provides no mileage payment at all, you can claim Mileage Allowance Relief (MAR) on the difference, effectively reducing your tax bill.
Understanding Approved Mileage Allowance Payments
Approved Mileage Allowance Payments represent the maximum amount employers can reimburse employees tax-free when they use their own vehicles for business journeys. The system eliminates the need for complex record-keeping of actual vehicle expenses by providing flat rates that HMRC considers representative of typical running costs. This simplification benefits both employers, who avoid administrative burden, and employees, who receive a straightforward calculation without needing to track individual receipts for fuel, maintenance, or insurance.
The legal framework for AMAP is established in sections 229 to 236 of the Income Tax (Earnings and Pensions) Act 2003. Under this legislation, any mileage payments up to the approved amount are exempt from income tax and National Insurance contributions. Employers are not required to report payments within these limits to HMRC, creating a genuinely tax-free benefit. However, if employers choose to pay above these rates, the excess becomes taxable as earnings and must be reported on form P11D.
It is important to understand that AMAP only applies to employees using their own personal vehicles. If you have a company car, different rules apply through the Advisory Fuel Rate system, which varies based on engine size and fuel type. The distinction is crucial because claiming the wrong rate could result in incorrect tax calculations and potential enquiries from HMRC.
Current HMRC Mileage Rates for 2025/26 Tax Year
The HMRC approved mileage rates for the 2025/26 tax year remain at the same levels introduced back in April 2011. For cars and vans, including electric vehicles, the rate stands at 45 pence per mile for the first 10,000 business miles during the tax year, dropping to 25 pence per mile for each additional mile beyond that threshold. This two-tier structure acknowledges that fixed costs like insurance and road tax represent a higher proportion of overall expenses for lower-mileage drivers.
Motorcycles receive a flat rate of 24 pence per mile regardless of how many business miles you travel during the year. This single rate reflects the different cost structure of motorcycle ownership and operation compared to cars. Similarly, bicycles qualify for 20 pence per mile at a flat rate, covering maintenance, depreciation, and other cycling-related expenses even though fuel costs do not apply.
An additional passenger rate of 5 pence per mile is available when you carry colleagues in your car or van on journeys that also constitute business travel for them. This supplementary payment recognises the extra wear and fuel consumption from carrying passengers. However, you can only claim this passenger allowance if your employer specifically makes the payment for this purpose. Unlike the main mileage rates, there is no tax relief available if you carry passengers but receive no passenger payment.
The AMAP rates apply equally to petrol, diesel, hybrid, and fully electric vehicles. Despite the lower running costs typically associated with electric cars, HMRC has maintained parity across all fuel types for personal vehicles used for business travel. This means electric vehicle owners can benefit from rates that may exceed their actual per-mile costs.
What Qualifies as Business Mileage
Understanding what constitutes claimable business mileage is fundamental to making accurate calculations. HMRC has clear guidelines distinguishing between ordinary commuting, which does not qualify, and genuine business travel, which does. Ordinary commuting means travel between your home and your permanent workplace. Even if your journey is lengthy or inconvenient, regular travel to your normal place of work cannot be claimed as business mileage under any circumstances.
Business mileage includes travel between different workplaces during the working day, journeys to temporary workplaces, visits to clients or customers, attendance at meetings away from your normal office, and travel to training courses. A temporary workplace is defined as somewhere you expect to work for less than 24 months. Once a location becomes permanent, or you expect to remain there for over 24 months, travel to that site reverts to being ordinary commuting and loses its tax-free status.
For employees who work from home as their permanent base, travel to the employer’s office becomes business mileage because the office represents a temporary workplace for them. This distinction has become increasingly relevant with the growth of hybrid working arrangements. However, employees must genuinely work from home as their primary location, not simply have an arrangement where they occasionally work remotely whilst maintaining a permanent office presence.
If Total Miles is 10,000 or less: Allowance = Total Miles x 0.45
How Mileage Allowance Relief Works
Mileage Allowance Relief provides a mechanism for employees to recover tax on the difference between HMRC approved rates and what their employer actually pays. This relief exists because many employers either pay nothing for mileage or reimburse at rates below the approved amounts. The shortfall represents a genuine expense incurred whilst performing your employment duties, making it eligible for tax relief just like other allowable employment expenses.
The relief operates by reducing your taxable income by the amount of the shortfall. If your employer pays 20 pence per mile and you travel 8,000 business miles, your shortfall is 25 pence per mile (45p minus 20p), totalling 2,000 pounds. As a basic rate taxpayer at 20%, claiming this relief would reduce your tax bill by 400 pounds. Higher rate taxpayers at 40% would save 800 pounds, whilst additional rate taxpayers at 45% would save 900 pounds on the same mileage.
The relief only applies to the extent that your employer pays below the approved rates. If your employer pays exactly 45 pence per mile for the first 10,000 miles and 25 pence thereafter, no relief is available because you have already received the full tax-free amount. Conversely, if your employer pays above these rates, the excess becomes taxable income and you will owe additional tax rather than receiving relief.
The tax relief you receive depends on your income tax band. Basic rate taxpayers recover 20 percent of the shortfall, higher rate taxpayers recover 40 percent, whilst additional rate taxpayers recover 45 percent. Scottish taxpayers should use their applicable Scottish income tax rates, which may differ from the rest of the UK.
How to Claim Mileage Allowance Relief
The method for claiming Mileage Allowance Relief depends on your circumstances and the total amount of employment expenses you wish to claim. For most employed individuals with total employment expense claims of 2,500 pounds or less per year, the simplest route is completing HMRC form P87. This form can be submitted online through your Personal Tax Account or downloaded as a paper form and posted to HMRC. The online process typically results in faster processing, with most claims handled within 8 to 12 weeks.
If your total employment expense claims exceed 2,500 pounds, or you already complete a Self Assessment tax return for other reasons, you should include your mileage claim within your annual tax return. This applies to anyone who is self-employed, has income from property, or has other circumstances requiring Self Assessment. The mileage claim appears in the employment section of the return under expenses, and the relief is automatically factored into your overall tax calculation.
Regardless of which method you use, HMRC requires you to maintain detailed records supporting your claim. These records should include the date of each journey, your starting point and destination, the business purpose of the trip, and the total miles travelled. You should also record any mileage payments received from your employer. Keep these records for at least five years after the tax year to which they relate, as HMRC may request evidence if they query your claim.
Record Keeping Requirements
Maintaining accurate mileage records is not merely good practice but a legal requirement when claiming tax relief. HMRC expects contemporaneous records, meaning you should log journeys as they occur rather than attempting to reconstruct them from memory at year end. A simple mileage log capturing date, destination, purpose, and miles for each trip will satisfy HMRC requirements, whether kept in a physical notebook, spreadsheet, or dedicated mileage tracking application.
Your records should clearly distinguish between business mileage and personal travel. If you use your vehicle for both purposes, only the business portion qualifies for allowances. Some employees find it helpful to record odometer readings at the start and end of each business trip, whilst others prefer using satellite navigation or smartphone apps that automatically track journey distances. The method matters less than the accuracy and completeness of your records.
Beyond basic journey details, retain any correspondence with your employer about mileage payments. Keep payslips or payment records showing what mileage reimbursement you received, and maintain copies of your expense claims if you submit them through your employer’s system. If HMRC enquires into your claim, having comprehensive documentation will make the process significantly smoother and reduce the risk of your relief being disallowed.
Sarah drives 12,000 business miles during the 2025/26 tax year. Her employer pays 25 pence per mile for all mileage. Sarah is a higher rate taxpayer at 40%.
AMAP Entitlement: (10,000 x 0.45) + (2,000 x 0.25) = 4,500 + 500 = 5,000 pounds
Employer Payment: 12,000 x 0.25 = 3,000 pounds
Shortfall: 5,000 – 3,000 = 2,000 pounds
Tax Relief: 2,000 x 0.40 = 800 pounds saving
Motorcycles and Bicycles
Whilst cars and vans represent the most common vehicles for business travel, motorcycles and bicycles each have their own approved mileage rates. Motorcycle users can claim 24 pence per mile for all business journeys, with no distinction between the first 10,000 miles and subsequent mileage. This flat rate acknowledges the different cost structure of motorcycle ownership compared to four-wheeled vehicles, where factors like fuel consumption and maintenance follow different patterns.
Bicycle mileage attracts an approved rate of 20 pence per mile, again as a flat rate regardless of total distance travelled. This provision recognises that cyclists incur genuine costs including bicycle purchase and depreciation, maintenance and repairs, replacement parts like tyres and brake pads, and cycling-specific equipment. The rate applies whether you use a traditional bicycle, an electric bike, or a cargo cycle for business purposes.
These rates can be particularly valuable for employees in urban areas where cycling or motorcycling proves more practical than driving. The tax-free nature of payments up to these rates means employers can support sustainable transport choices without creating additional tax liabilities for employees. For those whose employers pay nothing for alternative transport, claiming Mileage Allowance Relief ensures the tax benefit is not lost entirely.
Employer Obligations and Reporting
Employers have specific responsibilities regarding mileage payments to employees. When paying at or below AMAP rates, employers need not report these payments to HMRC or include them on employees’ P11D forms. This exemption represents a significant administrative simplification, as mileage payments meeting AMAP criteria fall entirely outside the PAYE system. Employers simply pay the amount tax-free and maintain their own records.
However, if employers choose to pay above the approved rates, the excess must be treated as taxable earnings. This creates obligations to report the excess amount on the employee’s P11D, add it to their taxable pay for the year, and calculate and pay employer’s National Insurance contributions on the excess. The administrative burden of exceeding AMAP rates leads most employers to cap their mileage payments at the approved levels.
Some employers participate in the Mileage Allowance Relief Optional Reporting Scheme (MARORS), which allows them to claim Mileage Allowance Relief on behalf of employees who are paid below AMAP rates. Under this scheme, employers report the shortfall to HMRC and the relief is applied through employees’ tax codes. This removes the need for employees to make individual claims, though not all employers choose to participate in the scheme.
You can claim Mileage Allowance Relief for the current tax year and the four previous tax years. For example, during the 2025/26 tax year, you can still submit claims relating to 2021/22 and subsequent years. Making backdated claims for multiple years can result in substantial refunds for employees who were unaware of their entitlements.
Self-Employed Mileage Claims
Self-employed individuals have a choice between claiming simplified mileage expenses using the approved rates or tracking actual vehicle costs and claiming capital allowances. The simplified mileage method uses the same rates as AMAP: 45 pence per mile for the first 10,000 business miles and 25 pence thereafter for cars, 24 pence for motorcycles, and 20 pence for bicycles. Once you choose a method for a particular vehicle, you must continue using that method for as long as you use that vehicle in your business.
The actual costs method allows you to claim a proportion of all vehicle running expenses based on business use, plus capital allowances on the purchase price. This approach requires more detailed record-keeping, tracking fuel, insurance, road tax, MOT, servicing, repairs, and other costs throughout the year. You then calculate the business proportion based on your mileage logs and claim that percentage of total costs.
For most self-employed individuals, the simplified mileage method proves more advantageous, particularly for those with lower annual mileage or who drive newer, more reliable vehicles. The 45 pence per mile rate often exceeds actual costs, especially for fuel-efficient vehicles, creating a larger tax deduction than actual expenses would provide. However, high-mileage drivers in expensive-to-run vehicles might benefit from the actual costs approach.
Impact of Hybrid and Remote Working
The growth of hybrid working arrangements has created new considerations for mileage claims. Employees who work primarily from home may find that travel to their employer’s office now qualifies as business mileage, as the office becomes a temporary workplace rather than their permanent base. However, the rules require genuine home-based working, not simply occasional remote work whilst maintaining an office presence.
For hybrid workers, each journey must be evaluated based on whether the destination represents a temporary workplace. If you work from home three days per week and attend the office twice weekly, those office visits may qualify as business mileage if your home is genuinely your permanent workplace. HMRC considers factors like where you spend most of your working time, where your employer expects you to work, and the terms of your employment contract.
The 24-month rule remains relevant for hybrid workers. If you have attended, or expect to attend, a particular workplace for a continuous period exceeding 24 months, that location becomes permanent regardless of working patterns. Breaks in attendance do not reset this clock unless they represent a genuine change in working arrangements rather than temporary absence due to illness, leave, or short-term projects elsewhere.
Common Mistakes to Avoid
Several common errors can result in incorrect mileage claims or missed entitlements. The most frequent mistake involves claiming ordinary commuting as business mileage. Travel between your home and permanent workplace never qualifies, regardless of distance or inconvenience. Employees who travel to different sites must carefully assess whether each location represents a temporary or permanent workplace, as the rules can be nuanced.
Another common error involves misunderstanding the 10,000-mile threshold. This threshold applies per tax year, not per calendar year or per employer. If you change jobs mid-year, your mileage accumulates across both employments for determining which rate applies. Similarly, employees with multiple jobs should combine their business mileage when calculating entitlements, as the threshold relates to total business miles rather than miles per employment.
Some employees fail to claim relief for years when they were unaware of their entitlements. With backdated claims possible for four previous years, significant sums may be recoverable. Other mistakes include claiming company car mileage at AMAP rates (company cars use different Advisory Fuel Rates) and failing to maintain adequate records to support claims. Taking time to understand the rules and keep proper documentation prevents these issues.
Comparison with Company Car Advisory Rates
Employees with company cars cannot claim AMAP rates for business travel in their company vehicle. Instead, when the employee pays for fuel in a company car, the employer can reimburse at Advisory Fuel Rates (AFR), which vary based on engine size and fuel type. These rates are updated quarterly and typically range from approximately 9 pence to 26 pence per mile depending on vehicle specifications, significantly below AMAP rates.
The difference reflects that AMAP covers all vehicle costs including depreciation, insurance, road tax, and maintenance, whilst AFR covers only fuel costs. Company car drivers already receive the benefit of employer-provided vehicles, so reimbursement focuses solely on the fuel they purchase. For petrol cars, rates range from approximately 13 pence for smaller engines to 23 pence for larger engines, with diesel and LPG vehicles having their own respective scales.
From September 2025, HMRC introduced separate Advisory Electricity Rates for company electric vehicles at 8 pence per mile for home charging and 14 pence per mile for public charging. These rates recognise the different cost structures of electric vehicle charging compared to traditional fuel. The distinction between home and public charging acknowledges the significant price difference between domestic electricity and commercial charging points.
Planning and Maximising Your Claim
Strategic planning can help maximise your mileage allowance benefits within the rules. If you have flexibility in when you undertake business travel, consider timing to optimise your position. For example, if approaching 10,000 miles near tax year end, completing additional journeys before April 5th captures those miles at 45 pence rather than 25 pence in the following year.
Review your employer’s mileage policy and understand exactly what they pay. Some employers pay different rates for different journey types or have caps on claimable mileage. Knowing your employer’s approach helps you identify any shortfall eligible for tax relief. If your employer pays nothing, the entire AMAP amount represents potential relief, which can be substantial for regular business drivers.
Consider whether all your business journeys are being captured. Trips to meetings, training courses, client visits, and similar travel all qualify if they represent genuine business purposes. Some employees undercount their mileage by forgetting occasional trips or assuming certain categories do not qualify. Reviewing your calendar against your mileage log can identify missed journeys that could be added to your claim.
If you use different vehicles for business travel, track mileage separately for each. The AMAP rates differ between cars, motorcycles, and bicycles. The 10,000-mile threshold for cars applies to combined car mileage, not per vehicle. Using a motorcycle for some journeys and a car for others requires separate calculations applying the correct rate to each vehicle type.
Tax Implications for Higher Earners
Higher and additional rate taxpayers benefit more from Mileage Allowance Relief because the relief applies at their marginal rate. A 2,000-pound shortfall generates 400 pounds relief for basic rate taxpayers but 800 pounds for higher rate taxpayers and 900 pounds for additional rate taxpayers. This makes tracking and claiming mileage particularly worthwhile for those in higher tax brackets.
Scottish taxpayers have their own income tax rates and bands, which may result in different relief amounts. Scottish starter, basic, intermediate, and higher rate taxpayers should calculate relief using their applicable Scottish rates rather than the UK rates. The rates change periodically, so verify current Scottish rates when calculating your expected relief.
Consider interaction with other aspects of your tax position. If you receive income close to thresholds for personal allowance tapering, child benefit charges, or other income-related provisions, the reduction in taxable income from mileage relief might have secondary benefits. These interactions can make accurate mileage claims more valuable than the basic relief calculation suggests.
Future Outlook for Mileage Rates
The AMAP rates have remained unchanged since April 2011, despite significant increases in fuel prices and general motoring costs during that period. Various organisations, MPs, and industry bodies have called for rate increases, arguing that the current levels no longer reflect actual vehicle running costs. An Early Day Motion in Parliament gathered over 100 signatures supporting a review, though the government has not indicated intentions to increase rates.
The static nature of AMAP rates means their real value has declined over time as inflation erodes purchasing power. Employees receiving the full 45 pence per mile today face higher actual costs than those receiving the same rate when it was introduced. This gradual erosion has led some employers to supplement AMAP payments with additional taxable allowances to ensure employees are fairly compensated.
Any future changes to AMAP would require Treasury regulations amending the current rates. The government considers factors including the cost to the exchequer of rate increases, the administrative impact on businesses, and the overall fiscal position when evaluating changes. Until amendments occur, the current rates continue to apply for all eligible business mileage claims.
Frequently Asked Questions
Conclusion
Understanding and correctly claiming your mileage allowance entitlement can result in significant tax savings for anyone using their personal vehicle for business travel. The AMAP system provides a straightforward framework with clear rates and thresholds, making it accessible for both employers making payments and employees claiming relief. Whether you receive full AMAP payments from your employer, partial reimbursement, or nothing at all, knowing your entitlements ensures you are not paying more tax than necessary.
The key to successful mileage claims lies in maintaining accurate records throughout the year. By logging your business journeys as they occur, you build the evidence base needed to support claims and avoid potential enquiries from HMRC. Whether using a paper log, spreadsheet, or dedicated app, consistency and completeness matter more than the method you choose. Remember to distinguish carefully between business travel, which qualifies, and ordinary commuting, which never does.
For employees whose employers underpay or make no mileage payments, Mileage Allowance Relief offers a valuable route to recover tax on the shortfall. With the ability to claim for the current year and four previous years, backdated claims can recover substantial amounts for those who were previously unaware of their entitlements. Take advantage of this calculator to determine your position and take appropriate action to claim what you are legitimately owed.