After more than 15 years without an increase, HMRC has finally raised the Approved Mileage Allowance Payment (AMAP) rate for cars and vans.
From 6th April 2026, the approved rate increased from 45p per mile to 55p per mile for the first 10,000 business miles travelled each tax year.
For business owners, directors, consultants, and employees who regularly travel for work, this means a larger tax-free reimbursement and potentially more money back in your pocket.
What Has Changed?
From 6th April 2026, the HMRC-approved mileage rate for cars and vans increased to 55p per mile for the first 10,000 business miles travelled in a tax year. Once you exceed 10,000 business miles, the rate remains unchanged at 25p per mile.
The approved mileage rate for motorcycles remains unchanged at 24p per mile, regardless of the number of business miles travelled. Similarly, the rate for bicycles stays at 20p per mile for all business mileage.
The headline change is the increase from 45p to 55p per mile for cars and vans. For someone travelling 10,000 business miles per year, that’s an additional £1,000 of allowable mileage reimbursement compared to the previous rate.
Who Benefits?
This change could benefit:
- Company directors travelling between business locations
- Consultants visiting clients
- Tradespeople travelling to jobs
- Gym owners operating across multiple sites
- Sales teams attending meetings
- Employees who regularly travel for work
If you’re using your own vehicle for genuine business journeys, the higher rate could make a noticeable difference over the course of a year.
What Counts as Business Mileage?
This is where many people get caught out.
The approved mileage rate only applies to business travel.
Examples include:
- Travelling to meet clients
- Visiting a second business location
- Attending meetings away from your normal workplace
- Travelling between business sites
What it does not include is your normal commute between home and your regular workplace.
Unfortunately, driving from home to the office each day is still considered ordinary commuting and cannot be claimed as business mileage.
Understanding the difference is essential to ensuring your claims remain compliant with HMRC rules.
It’s also worth remembering that HMRC allows an additional 5p per passenger, per mile when you carry fellow employees on a qualifying business journey in your own vehicle. For example, carrying two colleagues would allow you to claim an extra 10p per mile on top of the standard mileage rate.
What If Your Employer Pays Less?
Not every employer reimburses mileage at the full HMRC approved rate.
If your employer pays less than 55p per mile, you may be able to claim tax relief on the difference through HMRC.
For example, if your employer reimburses 40p per mile and the approved rate is 55p, you could potentially claim relief on the remaining 15p per mile.
While this won’t give you the full difference back, it can still reduce the amount of tax you pay.
Many employees miss out on this relief simply because they don’t realise they’re entitled to claim it.
Why This Matters
A 10p increase might not sound significant at first glance, but it soon adds up.
At 5,000 business miles, that’s an extra £500.
At 10,000 business miles, that’s an extra £1,000.
With vehicle costs, servicing, repairs, insurance and fuel continuing to rise, the increase is a welcome update that better reflects the real cost of using your own vehicle for business.
Final Thoughts
This is one of the most positive changes to business mileage allowances we’ve seen in years.
Whether you’re a company director, consultant, employee or business owner, it’s worth reviewing your mileage claims to ensure you’re making the most of the new allowance from 6th April 2026.
And if your business reimburses employee mileage, now is a good time to review your expense policies and ensure they’re aligned with the latest HMRC rates.
After 15 years without a change, we’ll happily take the extra 10p per mile.
Get in touch with our team today to find out how we can support you.
info@future-cloud.co.uk
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