Worked example
Jordan runs a self-employed decorating business. In 2026/27 Jordan drove 12,000 business miles in a van and cycled 300 miles to quote for nearby jobs.
| Step | Amount |
|---|---|
| First 10,000 van miles × 45p | £4,500.00 |
| Next 2,000 van miles × 25p | £500.00 |
| 300 bicycle miles × 20p | £60.00 |
| Total mileage claim | £5,060.00 |
| Saving at 20% income tax + 6% Class 4 NI | £1,315.60 |
If Jordan were instead an employee whose employer paid 25p a mile for those 12,000 van miles (£3,000), the approved amount for the van would be £5,000, so Jordan could claim tax relief on the £2,000 gap — worth £400 to a basic-rate taxpayer.
How it works, in plain English
HMRC publishes approved mileage rates that are meant to cover the full cost of using your own vehicle for work: fuel, insurance, servicing, repairs, road tax and depreciation.
The 2026/27 rates
- Cars and vans: 45p a mile for the first 10,000 business miles in the tax year, then 25p a mile.
- Motorcycles: 24p a mile.
- Bicycles: 20p a mile.
The 10,000-mile switch applies to all your cars and vans together, not to each vehicle, and it resets every 6 April.
If you are self-employed
Your mileage claim is an allowable expense, so it comes off your profit before income tax and Class 4 National Insurance are worked out. You cannot also claim fuel, insurance or repairs for that vehicle. Cars and vans can only use the flat rate if you have not claimed capital allowances on them, and you have to stick with the method for as long as you use that vehicle. Parking and tolls on business trips can still be claimed on top.
If you are an employee
Your employer can pay you up to the approved amount tax-free. If they pay less, or nothing, you can claim Mileage Allowance Relief on the difference — through a P87 claim on GOV.UK, or on your Self Assessment return. The relief is the shortfall multiplied by your tax rate, so a £2,000 gap saves a basic-rate taxpayer £400. If your employer pays more than the approved rate, the extra is taxable.
What counts as a business mile
Trips to clients, customers, suppliers and temporary workplaces count. Your normal commute to a permanent workplace does not. A simple log of the date, where you went, why, and the miles is the evidence HMRC expects.
Frequently asked questions
What is the HMRC mileage rate for 2026/27?
45p a mile for the first 10,000 business miles in a car or van, then 25p a mile. Motorcycles are 24p and bicycles 20p, whatever the distance.
Does the 10,000-mile limit apply per car?
No. It covers all the cars and vans you use for business in the tax year combined. Once your total passes 10,000 miles, every further mile is at 25p until the next tax year starts on 6 April.
Can I claim fuel as well as 45p a mile?
No. The flat rate already includes fuel and all other running costs. You can claim parking, tolls and congestion charges on business journeys on top of it.
My employer pays 30p a mile. Can I claim the rest?
Yes. Work out the approved amount for your business miles, subtract what your employer paid, and claim Mileage Allowance Relief on the difference. Choose "Employee" above to see the figure.
Do I need receipts for a mileage claim?
You do not need fuel receipts, but you should keep a record of each business journey: date, start and end point, purpose and miles. HMRC can ask to see it, and a log built up as you go is far more convincing than one reconstructed later.
Estimates only, not tax advice. These figures are a guide based on the information you enter and the 2026/27 rules. Your own position can differ — check GOV.UK or an accountant before relying on them.
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