HMRC Mileage Rates Updated for 2026/27

HMRC has updated its travel mileage and fuel allowance guidance for the 2026/27 tax year, including an increase to the approved mileage rate for employees using their own cars or vans for business journeys.

From 6 April 2026, the approved mileage allowance payment for cars and vans rises to 55p per mile for the first 10,000 business miles in the tax year. The rate for business miles above 10,000 remains 25p per mile.

The updated approved mileage rates are:

Vehicle type	First 10,000 business miles	Each business mile over 10,000
Cars and vans	55p	25p
Motor cycles	24p	24p
Bicycles	20p	20p

The previous car and van rate, which applied from the 2011/12 tax year through to 2025/26, was 45p per mile for the first 10,000 business miles and 25p per mile thereafter. This means businesses should review their mileage reimbursement processes for the new tax year.

Employers can generally reimburse employees up to HMRC approved mileage rates for qualifying business travel without creating an additional tax charge, provided the journeys are genuinely business-related and adequate records are kept.

Employees carrying fellow employees in their own car or van on a qualifying business journey may also be paid an additional 5p per passenger per business mile, where the payment is specifically for carrying passengers.

Businesses should ensure their payroll, expense policies and bookkeeping systems are updated for the new rates from April 2026. Mileage claims should continue to be supported by clear records, including the date, destination, purpose of the journey and number of business miles travelled.

If you are unsure how the updated rates affect your business, employees or director expense claims, please contact us and we will be happy to help.