From April 2026, the UK’s approved mileage allowance for employees using their own vehicle for business travel is increasing from 45p to 55p per mile for the first 10,000 miles travelled in a tax year.
This update could have a significant impact on both employees and businesses, especially as fuel, insurance, and vehicle maintenance costs continue to rise.
Official HMRC guidance:
HMRC Mileage Rates
What Is the Mileage Allowance?
The Approved Mileage Allowance Payment (AMAP) is the amount employees can claim when they use their personal vehicle for work-related travel.
This applies to trips such as:
- Visiting clients
- Travelling between work locations
- Temporary business travel
- Site visits and meetings
It does not usually apply to normal commuting between home and a permanent workplace.
More details here:
HMRC Business Travel Rules
What’s Changing in April 2026?
The key update is simple:
- Current rate: 45p per mile
- New rate from April 2026: 55p per mile
- Applies to the first 10,000 business miles in the tax year
After 10,000 miles, the lower mileage rate will continue to apply.
This increase is designed to better reflect the real costs of running a vehicle, including fuel, servicing, repairs, and insurance.
Why This Matters for Employees
For employees who regularly travel for work, this could mean:
- Higher reimbursements
- Reduced out-of-pocket expenses
- Better tax relief opportunities
- Fairer compensation for business travel
For example, someone travelling 8,000 business miles annually could potentially receive significantly more reimbursement compared to previous years.
Why Businesses Should Pay Attention
Businesses should review their:
- Mileage reimbursement policies
- Payroll processes
- Expense systems
- Employee travel policies
Failing to update reimbursement rates could lead to employee dissatisfaction or unnecessary administrative issues.
Businesses may also want to ensure accurate mileage tracking and record-keeping ahead of the change.
Record Keeping Still Matters
Even with the new rate increase, employees and businesses should still maintain accurate mileage records, including:
- Date of travel
- Purpose of the journey
- Start and end locations
- Total miles travelled
Good documentation helps support tax compliance and avoids issues if records are ever reviewed.
HMRC guidance on mileage claims:
Mileage Claim Guidance
Final Thoughts
The increase to 55p per mile from April 2026 is welcome news for employees using their own vehicles for business travel across the UK.
As operating costs continue to rise, this update provides more realistic support for work-related travel expenses while encouraging businesses to keep their expense systems up to date.
If you’re an employer, now is a good time to review your mileage policies before the new tax year begins.
Get in touch with our team today to find out how we can support you.
info@future-cloud.co.uk
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