Mileage Allowance Calculator UK 2025/26

HMRC-approved mileage allowance payments let UK employees and self-employed individuals claim tax-free reimbursement for business journeys made in their own vehicle, with the current rate set at 45p per mile for the first 10,000 business miles in a tax year and 25p per mile thereafter. For a sales representative driving 15,000 business miles annually, this means a total claim of £5,750 — comprising £4,500 for the first 10,000 miles and £1,250 for the remaining 5,000. If your employer pays less than the approved rate, you can claim Mileage Allowance Relief on the difference through your self-assessment tax return or by contacting HMRC. Bicycle users can claim 20p per mile, and motorcycle users 24p per mile regardless of distance. This calculator works out your exact mileage claim and potential tax relief based on your annual business mileage and current reimbursement rate.

How to Use This Calculator

Enter your total annual business mileage — only include qualifying business journeys, not your regular commute.

Select your vehicle type (car/van, motorcycle, or bicycle) to apply the correct HMRC-approved rate.

Input any mileage reimbursement your employer already pays so the calculator can work out whether you are owed additional tax relief.

Review your total mileage claim, tax relief available, and the actual cash value of that relief based on your income tax band.

HMRC’s Approved Mileage Allowance Payment (AMAP) rates for 2025/26 are 45p per mile for the first 10,000 business miles in a car or van, then 25p per mile after that. Motorcycles get 24p per mile and bicycles 20p per mile, both at a flat rate regardless of distance.

HMRC Mileage Allowance (AMAP) Rates 2025/26

The AMAP rates have remained unchanged since 2012. Cars and vans get 45p for the first 10,000 miles and 25p thereafter. These rates apply to employees using their own vehicle for business travel — not company cars.

The 10,000-mile threshold resets at the start of each tax year (6 April). Miles driven for different employers in the same year are combined — not counted separately. If you drive 8,000 business miles for one employer and 5,000 for another, only 10,000 of those 13,000 miles qualify for the 45p rate.

These rates cover all running costs: fuel, insurance, road tax, MOT, servicing, depreciation, and wear. You cannot claim AMAP rates and then also claim individual expenses like fuel receipts on top.

What Counts as Business Mileage?

Business mileage includes travel to temporary workplaces, client sites, meetings, and training venues. Your regular commute to a permanent workplace does not count. Journeys between workplaces (site to office) usually qualify.

HMRC distinguishes between ordinary commuting (home to permanent workplace) and business travel. The key rules:

• Qualifies: Client visits, supplier meetings, training at another site, travel between two workplaces, travel to a temporary workplace (under 24 months at one location)
• Does not qualify: Home to your regular office, home to a co-working space you use daily, travel that is “substantially ordinary commuting”
• Mixed journeys: If you stop at a client en route from home to the office, only the additional mileage beyond your normal commute counts

For mobile workers with no fixed office (sales reps, tradespeople, delivery drivers), most travel qualifies as business mileage because they have no permanent workplace. This is one reason vehicle tracking software is valuable — it provides HMRC-compliant mileage logs automatically.

How to Claim Mileage Allowance Relief (MAR)

If your employer pays less than HMRC’s AMAP rates, you can claim tax relief on the difference. Basic rate taxpayers save 20% of the shortfall, higher rate taxpayers save 40%. Claim via form P87 or your Self Assessment return.

Many employers pay their own mileage rate (often 25p or 30p per mile) rather than the full HMRC rate. When this happens, you can claim Mileage Allowance Relief (MAR) on the difference.

For example, if you drive 12,000 business miles and your employer pays 25p per mile:

• HMRC allowance: (10,000 × 45p) + (2,000 × 25p) = £5,000
• Employer pays: 12,000 × 25p = £3,000
• Shortfall: £2,000
• Tax relief (basic rate): £2,000 × 20% = £400 back from HMRC

There are two ways to claim:

1. Form P87: For employed workers not in Self Assessment. Submit online through your HMRC Personal Tax Account or by post. Claims must be made within 4 years of the end of the tax year.
2. Self Assessment: Include the mileage allowance relief on your tax return under employment expenses. The tax relief is applied to your tax bill automatically.

Carrying Passengers: The 5p Supplement

Employees who carry fellow employees as passengers on business trips can claim an additional 5p per passenger per mile. This supplement is tax-free and applies on top of the standard AMAP rates.

The passenger supplement is designed to encourage car-sharing on business journeys. The rules are specific:

• The passenger must be a fellow employee (not a client or family member)
• The journey must be a business trip (not commuting)
• Both driver and passenger must be travelling for business purposes
• There is no limit on the number of passengers you can claim for

For a sales team travelling together to a client meeting 50 miles away (100-mile round trip) with 2 passengers, the supplement adds £10 per trip (100 miles × 5p × 2 passengers). Over a year of weekly client visits, that totals £520 in additional tax-free payments.

Electric and Hybrid Vehicles

Electric vehicles use the same 45p/25p AMAP rates as petrol and diesel cars. However, HMRC’s advisory electricity rate for company cars is just 8p per mile, making EVs significantly cheaper to run per business mile.

There is an important distinction between AMAP rates and advisory fuel rates:

• Own car (AMAP): Electric, hybrid, petrol, and diesel cars all get the same 45p/25p rate. HMRC does not differentiate by fuel type for personal vehicles used for business
• Company car (advisory rates): These are separate HMRC rates for reimbursing fuel in company cars. The electricity rate is 8p per mile (March 2025), compared to 14–17p for petrol/diesel

For employees using their own EV for business, the 45p AMAP rate significantly exceeds actual running costs (typically 4–8p per mile for electricity). This makes EVs highly tax-efficient for high-mileage business use.

HMRC Mileage Rates 2025/26: Quick Reference

The table shows tax-free mileage allowance payments at common annual business mileage levels for cars and vans.

Source: HMRC Approved Mileage Allowance Payments 2025/26. Cars/vans: 45p first 10,000 miles, 25p thereafter.

Related Calculators

Explore our other free business calculators:

• Employer NIC Calculator — Calculate employer National Insurance
• Pension Contribution Calculator — Model pension contributions
• Employee Cost Calculator — Calculate the true cost of hiring