HMRC Mileage Rates and Allowance - How to Claim
HMRC mileage rates and allowance remain one of the simplest ways for UK workers and business owners to reduce their tax bill in 2026, yet many still miss out on money they are fully entitled to claim. The rules are clear, the rates are fixed, and the process is straightforward. The real issue is lack of awareness and poor record keeping.
This guide breaks everything down in plain English so you can claim with confidence and keep more of your income.
What Are HMRC Mileage Rates and Allowance?
HMRC mileage rates are approved amounts you can claim for business travel when you use your own vehicle. Instead of tracking fuel, servicing, insurance, and depreciation separately, HMRC allows you to claim a fixed rate per mile.
This method is known as simplified expenses and works well for:
Self employed individuals
Employees using personal vehicles for work
Company directors
It saves time and keeps your records clean.
HMRC Mileage Rates 2026
Here are the current approved rates for business travel:
Cars and vans for the first 10,000 miles: 45p per mile
Cars and vans after 10,000 miles: 25p per mile
Motorcycles: 24p per mile
Bicycles: 20p per mile
These rates apply across the UK and are set by HMRC.
Who Can Claim Mileage Allowance?
Mileage claims are available to a wide range of workers:
Self employed
You can claim mileage as a business expense through your Self Assessment tax return.
Employees
If your employer does not reimburse you or pays less than HMRC rates, you can claim tax relief on the difference.
Limited company directors
You can claim mileage for business travel instead of charging fuel costs through the company.
What Counts as Business Mileage?
You can claim for journeys that are strictly business related, such as:
Travel to client meetings
Trips between different work locations
Visiting suppliers
Temporary workplaces
You cannot claim for:
Daily commute to a permanent workplace
Personal trips
Keeping this distinction clear is important to avoid incorrect claims.
How to Calculate Your Mileage Claim
Let’s break it down with a simple example.
If you travel 12,000 business miles in a year:
First 10,000 miles at 45p
Remaining 2,000 miles at 25p
Your total claim would be:
10,000 × 45p = £4,500
2,000 × 25p = £500
Total = £5,000 tax deductible expense
This directly reduces your taxable profit.
Common Mileage Claim Mistakes
Many people lose money due to small but costly errors:
Not tracking journeys regularly
Claiming personal trips as business travel
Forgetting short journeys
Using wrong rates
Missing deadlines for claims
Accurate records make a big difference over a full tax year.
What Records Do You Need?
To support your claim, keep a simple mileage log that includes:
Date of journey
Start and end location
Purpose of trip
Miles travelled
You can use apps, spreadsheets, or even a notebook as long as your records are clear.
How to Claim Mileage Allowance
The process depends on your situation:
Self employed
Include your mileage claim in your Self Assessment tax return under expenses.
Employees
Submit a P87 form or claim through your tax return.
Company directors
Record mileage and reimburse yourself through your company at HMRC rates.
Why Mileage Claims Matter More in 2026
With rising fuel and running costs, mileage claims are more valuable than ever. Even small weekly trips can add up to thousands of pounds in allowable expenses over the year.
Many taxpayers still underclaim simply because they do not track journeys or misunderstand the rules.
HMRC mileage rates and allowances offer a simple and effective way to reduce your tax bill without complex calculations. If you keep good records and apply the correct rates, you can claim back a significant amount every year.
If you want expert help to maximise your claims and stay compliant, consider working with accountants for self employed who can handle everything for you and help you keep more of what you earn.
Related Links:
accountants for self employed
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