The HMRC mileage allowance rate is 45p per mile for the first 10,000 business miles per tax year, then 25p per mile for additional miles. These Approved Mileage Allowance Payments (AMAP) rates let self-employed individuals and employees claim tax relief on business travel in personal vehicles.
This guide covers current mileage rates, what qualifies as business mileage, and how to claim correctly.
HMRC Mileage Rates 2025/26
Cars and Vans
| Miles Per Tax Year | Rate Per Mile | |-------------------|---------------| | First 10,000 miles | 45p | | Over 10,000 miles | 25p |
These rates have remained unchanged since 2011.
Other Vehicles
| Vehicle Type | Rate Per Mile | |--------------|---------------| | Motorcycle | 24p | | Bicycle | 20p |
Passenger Payments
If you carry a business passenger (colleague or client), claim an additional:
| Passenger | Rate Per Mile | |-----------|---------------| | Each passenger | 5p |
Example: Driving 100 miles to a client meeting with 2 colleagues.
- Mileage: 100 × 45p = £45.00
- Passengers: 100 × 5p × 2 = £10.00
- Total claim: £55.00
What the Mileage Rate Covers
The 45p/25p rate is designed to cover all vehicle running costs:
| Included in Mileage Rate | NOT Separately Claimable | |--------------------------|-------------------------| | Fuel | Cannot claim separately | | Insurance | Cannot claim separately | | Road tax | Cannot claim separately | | MOT | Cannot claim separately | | Servicing and repairs | Cannot claim separately | | Depreciation | Cannot claim separately | | Breakdown cover | Cannot claim separately |
Important: If you use simplified mileage rates, you cannot claim any other vehicle costs—the rate covers everything.
What Counts as Business Mileage
Claimable Business Journeys
| Journey Type | Claimable? | |--------------|------------| | Travel to client premises | Yes | | Travel to temporary workplace | Yes | | Travel to suppliers | Yes | | Travel between business locations | Yes | | Travel to the bank (business banking) | Yes | | Travel to training courses | Yes | | Travel to business meetings | Yes | | Delivery of goods to customers | Yes |
NOT Claimable
| Journey Type | Claimable? | |--------------|------------| | Home to regular workplace (commuting) | No | | Personal errands | No | | Travel to lunch | No | | Holidays with business elements | No |
The Commuting Rule
Ordinary commuting is NOT business mileage. This means travel between:
- Home and a permanent workplace
- Home and a regular place of work
Exception: If you work from home as your main place of business, travel to client sites or temporary workplaces IS business mileage.
24-Month Rule for Temporary Workplaces
A workplace is "temporary" if you expect to work there for less than 24 months. Travel to temporary workplaces is business mileage.
Example: You're a contractor working at a client's office for an 18-month project. Travel to that office is business mileage.
If the engagement extends beyond 24 months (or you expect it to from the start), it becomes a permanent workplace and travel is commuting.
Calculating Your Mileage Claim
Step 1: Record Every Business Journey
For each journey, record:
- Date of travel
- Start and end locations
- Purpose of the journey
- Miles travelled
Step 2: Total Your Annual Business Miles
Add up all business miles for the tax year (6 April – 5 April).
Step 3: Apply the Rates
If total business miles ≤ 10,000:
- Claim = Miles × 45p
If total business miles > 10,000:
- First 10,000 miles × 45p = £4,500
- Remaining miles × 25p
- Total claim = sum of both
Example Calculation
Rachel: Freelance Consultant, 14,000 business miles
| Miles | Rate | Amount | |-------|------|--------| | First 10,000 | 45p | £4,500.00 | | Next 4,000 | 25p | £1,000.00 | | Total | | £5,500.00 |
At 40% tax rate, this saves Rachel £2,200 in Income Tax and National Insurance.
Mileage for Self-Employed
Simplified Expenses Method
Self-employed individuals can use HMRC's simplified expenses for vehicle costs:
- Track all business miles
- Multiply by 45p (first 10,000) or 25p (over 10,000)
- Deduct total from business profits
This is the same rate as AMAP—you're essentially using your personal vehicle for business.
Actual Costs Method
Alternatively, calculate the business proportion of actual vehicle costs:
- Track total miles driven (business + personal)
- Track all vehicle costs (fuel, insurance, tax, repairs, etc.)
- Calculate business proportion: Business miles ÷ Total miles
- Claim: Total costs × Business proportion
Example:
- Total miles: 15,000 (10,000 business, 5,000 personal)
- Total vehicle costs: £4,000
- Business proportion: 10,000 ÷ 15,000 = 66.7%
- Claim: £4,000 × 66.7% = £2,668
Compare: Simplified expenses = 10,000 × 45p = £4,500
In this case, simplified expenses gives a higher claim.
Which Method to Choose
| Situation | Better Method | |-----------|---------------| | Low vehicle costs, high mileage | Simplified expenses | | Expensive vehicle with high running costs | Possibly actual costs | | Want simple record-keeping | Simplified expenses | | Mostly short journeys (high cost per mile) | Calculate both, compare |
Note: You cannot switch methods for the same vehicle. Once you choose, you must continue with that method until you change vehicles.
Capital Allowances (Actual Costs Only)
If using actual costs, you can also claim capital allowances on the vehicle purchase:
| Vehicle CO2 Emissions | First Year Allowance | |----------------------|---------------------| | 0g/km (electric) | 100% | | 1-50g/km | 18% writing down | | Over 50g/km | 6% writing down |
Only the business proportion of capital allowances is claimable.
Mileage for Employees
If Your Employer Pays Mileage
Many employers reimburse business mileage at the AMAP rate (45p/25p). If they do:
- No tax liability on payments up to AMAP rates
- No additional claim needed
If Your Employer Pays Less Than AMAP
If your employer pays less than 45p/25p per mile, you can claim Mileage Allowance Relief (MAR) on the difference.
Example:
- You drive 8,000 business miles
- Employer pays 30p per mile = £2,400 received
- AMAP rate: 8,000 × 45p = £3,600
- Claim: £3,600 − £2,400 = £1,200
At 40% tax rate, this saves £480.
How to Claim as an Employee
Option 1: P87 Form For claims under £2,500, submit Form P87 to HMRC.
Option 2: Self Assessment If you file Self Assessment for other reasons, include mileage claims on your return.
Option 3: Tax Code Adjustment HMRC may adjust your tax code to give relief through your salary.
Keeping a Mileage Log
HMRC requires evidence of business mileage. Keep a log with:
Required Information
| Field | Example | |-------|---------| | Date | 15 April 2025 | | From | Home (or office address) | | To | Client ABC, 123 High Street, Manchester | | Purpose | Client meeting to discuss project | | Miles | 45 miles |
Mileage Log Options
Paper Logbook:
- Traditional notebook in the car
- Transfer to spreadsheet monthly
Spreadsheet:
- Excel or Google Sheets
- Template with date, from, to, purpose, miles columns
Mobile Apps:
- MileIQ, Tripcatcher, Hurdlr
- Track trips via GPS automatically
- Categorise as business or personal
TaxFolio:
- Log mileage directly in the app
- Links to your tax calculations
- Included in MTD quarterly submissions
How Long to Keep Records
Keep mileage logs for 6 years after the tax year they relate to. HMRC can enquire within this period.
Common Mileage Mistakes
1. Claiming Commuting Miles
Travel from home to a regular workplace is NOT business mileage. This is the most common error.
Exception: If you genuinely work from home as your base, travel to temporary client sites may be claimable.
2. Not Keeping Records
"I drove about 5,000 business miles" isn't acceptable. You need contemporaneous records—ideally logged at the time of travel.
3. Claiming Both Mileage and Actual Costs
You cannot claim 45p per mile AND separately claim fuel, insurance, or other vehicle costs. Choose one method.
4. Including Personal Detours
If you stop for personal reasons during a business journey, only claim the business portion.
Example: Driving 50 miles to a client, stopping at a shop 5 miles off-route, then returning.
- Total driven: 60 miles
- Business miles: 50 miles (direct route)
- Claim: 50 miles, not 60
5. Forgetting Passenger Payments
If you regularly carry colleagues to business meetings, add 5p per mile per passenger.
Electric and Hybrid Vehicles
Electric Vehicles (EVs)
The 45p/25p rate applies to electric vehicles too—HMRC hasn't introduced a separate EV rate.
Reality check: Running an EV costs significantly less per mile than petrol/diesel. The 45p rate often exceeds actual costs, making EVs particularly tax-efficient for high-mileage business use.
Company Car Drivers
If you have a company car, you cannot claim mileage at 45p. Instead:
- Your employer reimburses fuel costs
- Or you receive Advisory Fuel Rates (AFRs)—lower rates set by HMRC based on fuel costs
Current Advisory Fuel Rates are updated quarterly.
Mileage and Making Tax Digital
From April 2026, mileage claims are included in MTD quarterly submissions:
- Log business miles throughout the quarter
- Software calculates the mileage deduction
- Included in your quarterly update to HMRC
- Final declaration confirms annual mileage claim
TaxFolio's mileage tracker integrates with MTD submissions automatically.
Example: Full Year Mileage Claim
Tom: Plumber (Self-Employed)
Business Mileage Log Summary:
| Quarter | Miles | Purpose | |---------|-------|---------| | Q1 (Apr-Jun) | 3,200 | Client jobs, supplier visits | | Q2 (Jul-Sep) | 2,800 | Client jobs | | Q3 (Oct-Dec) | 2,500 | Client jobs, training course | | Q4 (Jan-Mar) | 3,100 | Client jobs, supplier visits | | Total | 11,600 | |
Calculation: | Miles | Rate | Amount | |-------|------|--------| | First 10,000 | 45p | £4,500.00 | | Remaining 1,600 | 25p | £400.00 | | Total claim | | £4,900.00 |
Tax saved (at 40% + NI):
- Income Tax: £4,900 × 40% = £1,960
- Class 4 NI: £4,900 × 6% = £294
- Total saved: £2,254
Track Mileage with TaxFolio
TaxFolio makes mileage tracking simple:
- Easy mileage entry — log trips in seconds
- Automatic calculations — applies 45p/25p rates correctly
- Journey records — stores date, from, to, purpose, miles
- Running totals — see year-to-date business miles
- MTD integration — included in quarterly submissions
- HMRC-compliant records — stored for 6+ years
Start your free 30-day trial and never miss a mileage claim.
Summary: Mileage Allowance Rates
| Vehicle | First 10,000 Miles | Over 10,000 Miles | |---------|-------------------|-------------------| | Car/Van | 45p | 25p | | Motorcycle | 24p | 24p | | Bicycle | 20p | 20p | | Passenger supplement | +5p | +5p |
Key requirements:
- Keep a detailed mileage log
- Only claim genuine business journeys
- No commuting to regular workplaces
- Choose mileage rates OR actual costs (not both)
- Keep records for 6 years
Learn more about tax deductions and sole trader expenses you can claim.