HMRC Increases Mileage Claim Rates to 55p Per Mile

Some positive news to share on this sunny day for businesses, employees and the self-employed who regularly use their own vehicles for work purposes.

For the first time since 2011, HMRC has increased the Approved Mileage Allowance Payment (AMAP) rate from 45p per mile to 55p per mile.

The revised rate applies to the first 10,000 business miles travelled in a tax year, with the rate remaining at 25p per mile thereafter.

What Does This Mean in Practice?

Under the updated rules, someone travelling 10,000 business miles during the year could now claim:

10,000 miles × 55p = £5,500

This represents a significant increase in allowable tax-free mileage claims and will be welcome news for many business owners and employees facing increased motoring costs.

Backdated to April 2026

In further positive news, the revised mileage rate has been introduced retrospectively from April 2026.

This means businesses and individuals may need to review mileage claims already submitted during the current tax year to ensure the updated rates are being applied correctly.

Potentially a Temporary Measure

It is important to note that the increase may only be a temporary measure introduced as part of the Government’s wider cost-of-living and fuel support response during the current Iran crisis.

At present, no confirmation has been given on whether the 55p rate will remain in place beyond the current support period, so businesses and employees should continue monitoring future HMRC announcements.

Who Can Claim?

The mileage allowance rules apply broadly across:

• Limited Companies
• Sole Traders
• Employees

Where an individual uses their own vehicle for genuine business purposes, mileage can generally be claimed tax-free at the approved HMRC rates.

Examples of qualifying business journeys may include:

• Visiting clients
• Attending meetings
• Delivering goods or services
• Travelling between business locations

Ordinary commuting between home and a permanent workplace does not qualify.

Electric Vehicles Included

Electric vehicles also qualify for the same 55p per mile rate, making the changes particularly beneficial for EV drivers.

With more businesses transitioning to electric vehicles, the revised rate provides additional support for those using EVs for business travel.

A Welcome Change After More Than a Decade

With mileage rates having remained unchanged since 2011, this increase will be viewed positively by many individuals and businesses who have seen fuel, maintenance and vehicle costs rise substantially over recent years.

As always, specific circumstances may vary and professional advice should be sought where required.

For further information on the updated mileage allowance rates, please contact Langricks Chartered Accountants.