The mileage tax relief most employees never claim

If your employer pays you less than HMRC's mileage rate for using your own car at work, you can claim tax relief on the difference. That rate just rose to 55p a mile from April 2026, the first increase since 2011, which makes the gap bigger for almost everyone who drives for work.

Last updated: 22 May 2026

What the approved mileage rate actually is

When you use your own car for work, HMRC sets an Approved Mileage Allowance Payment (AMAP): a per-mile rate your employer can reimburse you completely tax-free. Pay up to that rate and there is no income tax and no National Insurance on a penny of it. You do not even have to declare it.

The rate is meant to cover everything: fuel, wear and tear, insurance, servicing, depreciation. For 2026/27 it works like this.

Vehicle	First 10,000 miles	Above 10,000 miles
Car or van	55p	25p
Motorcycle	24p	24p
Bicycle	20p	20p

The car and van rate rose from 45p to 55p on 6 April 2026, the first change since 2011. The 25p above-10,000 rate and the motorcycle and bicycle rates are unchanged.

Why most employees are owed money

Plenty of employers pay less than the approved rate. A common figure is 25p or 30p a mile, sometimes tied to an old company policy that never moved when the cost of running a car did. Some pay nothing at all for using your own vehicle.

Here is the part people miss: when your employer pays below the approved rate, you can claim tax relief on the shortfall. HMRC calls it Mileage Allowance Relief. If the approved rate is 55p and your employer pays 25p, you can claim relief on the 30p gap for every business mile you drive. The relief is yours whether or not your employer ever changes their rate.

Start by working out the approved-rate value of your miles for the year. That is the figure the relief is measured against.

Try the calculator

Mileage allowance calculator

Add a single trip, a week of journeys, or your whole year. It totals your miles at the approved rate and splits the year across the 55p and 25p tiers for you.

Open calculator

What the relief is actually worth

This is where people get the wrong number in their head. Mileage Allowance Relief does not hand you the full gap. It reduces your taxable income by the shortfall, so the cash you get back is the shortfall multiplied by your tax rate.

Take an employee who drives 8,000 business miles a year and is reimbursed at 20p a mile.

Approved-rate value (8,000 × 55p)	£4,400
Employer reimbursement (8,000 × 20p)	£1,600
Shortfall you can claim relief on	£2,800
Relief at 20% (basic rate)	£560
Relief at 42% (Scottish higher rate)	£1,176

The shortfall is £2,800, but the cheque is smaller. A basic-rate taxpayer gets £560 back. The same miles are worth £1,176 to a Scottish higher-rate taxpayer, because relief follows your top rate of tax.

The Scotland difference

The approved rate is identical wherever you live in the UK. There is no Scottish version of 55p. What changes north of the border is the value of the relief, because it is given at your marginal income tax rate and Scotland has its own bands. A higher-rate taxpayer in Scotland pays 42% where the rest of the UK pays 40%, so the same unclaimed mileage is worth a little more.

Here is what every £1,000 of unclaimed shortfall is worth back, depending on the band the relief lands in.

Your top tax rate	Relief per £1,000 of shortfall
Basic rate, 20% (rUK and Scotland)	£200
Intermediate, 21% (Scotland)	£210
Higher rate, 40% (rUK)	£400
Higher rate, 42% (Scotland)	£420
Top rate, 48% (Scotland)	£480

Relief is given at the rate of tax you would otherwise have paid on that slice of income. If you want to confirm which band your income sits in, the Scottish income tax calculator shows your bands for 2026/27.

The 10,000-mile step

For cars and vans the approved rate drops once you pass 10,000 business miles in a tax year. The first 10,000 are worth 55p each; every mile after that is worth 25p. Drive 12,000 business miles and the approved-rate value is £5,500 for the first 10,000 plus £500 for the last 2,000, so £6,000 in total.

The threshold resets each 6 April and counts only business miles, not your commute. The yearly tab of the mileage allowance calculator does the split automatically so you do not have to track when you crossed the line.

How to claim

There are two routes, and which one you use depends on whether you already file a tax return.

Form P87, if your claim is under £2,500

If your total employment expenses for the year are under £2,500 and you do not complete Self Assessment, claim through form P87 in your HMRC online account. It takes a few minutes once you have your mileage figures, and the relief usually comes back as a tax code change or a rebate.

Self Assessment, if you already file

If you complete a tax return, put the claim in the employment expenses section instead of filing a P87. If your annual expenses top £2,500, HMRC requires you to register for Self Assessment to claim them.

You can backdate four years

Never claimed before? You can go back up to four tax years. If you have been driving for work and getting paid below the approved rate that whole time, a first claim can cover several years at once. Each year is worked out at that year's rate, so older years use the 45p figure.

Keep a mileage log: the date, the route, the miles and the reason for each business trip. HMRC can ask to see it before paying, and a claim with no record behind it is the one most likely to be questioned. A note in your phone works; so does a paper logbook in the glovebox.

You can also ignore the companies that offer to claim your mileage rebate for a cut of the refund. The P87 is free and the form is short. There is no advantage to paying someone a percentage for it.

Cases that work differently

Your employer pays more than 55p. The excess flips the other way and becomes taxable income. Your employer reports it through payroll or a P11D, and you pay tax and National Insurance on the amount above the approved rate.
You are self-employed. You claim mileage as a business expense on your own Self Assessment using the same flat rates, rather than through Mileage Allowance Relief. Once you pick this method for a vehicle you have to stick with it for as long as you own that vehicle.
Carrying a colleague. Your employer can pay an extra 5p a mile, tax-free, for each fellow employee you carry on a business trip. There is no relief to claim if they choose not to pay it, so this one only helps if it is already in your reimbursement.
Your commute. Home to your permanent workplace never counts, however far it is. Only business travel qualifies: a temporary workplace, a client visit, or moving between sites during the working day.

The first move is the same for everyone: find out what your miles are worth at the approved rate, then check it against what your employer actually paid. Run your year through the mileage allowance calculator and you have the figure your claim is built on.

Frequently asked questions

How much can I claim per mile in 2026/27?

For a car or van, 55p a mile for your first 10,000 business miles in the tax year, then 25p a mile above that. Motorcycles are 24p a mile and bicycles 20p a mile, both flat with no 10,000-mile step. The 55p car rate took effect on 6 April 2026, up from 45p, the first change since 2011.

What if my employer already pays me for mileage?

You can claim tax relief on the gap between what your employer pays and the approved rate. If your employer pays 25p a mile and the approved rate is 55p, you can claim relief on the 30p difference for every business mile. If your employer pays more than the approved rate, the excess is taxable income instead.

Do I get the full difference back?

No, and this trips most people up. Mileage Allowance Relief reduces your taxable income by the shortfall, so what lands in your pocket is the shortfall multiplied by your tax rate. A £2,800 shortfall is worth £560 to a basic-rate taxpayer (20%) and £1,176 to a Scottish higher-rate taxpayer (42%).

How do I actually claim it?

If your total expenses claim is under £2,500 and you do not file a tax return, use form P87 through your HMRC online account. If you already complete Self Assessment, claim it on your return instead. You can backdate a claim up to four tax years, and HMRC can ask to see a mileage log, so keep a record of dates, routes and reasons.

Is the mileage rate different in Scotland?

No. The approved rates are set by HMRC and are the same across the whole UK, with no Scottish variant. What differs is the relief: it is given at your marginal income tax rate, so a Scottish taxpayer gets relief at Scottish rates (21% intermediate, 42% higher, 48% top) rather than the rest-of-UK bands.

Does my commute to work count?

No. Travel between home and your permanent workplace is ordinary commuting and cannot be claimed. Business travel does count: trips to a temporary workplace, visits to clients or sites, and journeys between work locations during the day.