Blog · October 27, 2026

HMRC mileage rate 2026/27: 55p a mile, backdated to 6 April

What changed

The 45p rate had not moved since 2011. The government announced the rise to 55p on 21 May 2026, and the Taxation (Energy and Vehicles) Act 2026 received Royal Assent on 15 July 2026. The rate above 10,000 miles stays at 25p.

Who it applies to

• Employees who use their own car or van for work. 55p is the approved mileage allowance payment (AMAP): an employer can pay up to this much per business mile tax-free. If your employer pays less, you can claim Mileage Allowance Relief from HMRC on the difference.
• Self-employed people, individuals carrying on a business and partnerships of individuals who use simplified expenses for their vehicle. The flat rate replaces the actual running costs of the car.

A worked example

You are self-employed and drive 12,000 business miles in the 2026/27 tax year.

10,000 × £0.55 + 2,000 × £0.25 = £5,500 + £500 = £6,000

At the old 45p rate the same miles would have given £5,000, so the change is worth £1,000 of allowable expenses here. Miles driven up to 5 April 2026 belong to the 2025/26 tax year and still use 45p.

Simplified expenses: the rules for the self-employed

• Once you choose it for a vehicle, you keep it. GOV.UK says that if you use flat rates for a vehicle, you must continue to do so for as long as you use that vehicle for your business. You can use flat rates for some vehicles and not others.
• Not every vehicle qualifies. You cannot use flat rates for a vehicle you have already claimed capital allowances on, or included as an expense when working out your profits, or for cars designed for commercial use such as black cabs and dual-control driving-instruction cars.
• Parking and other travel are separate. You can still claim parking and other travel costs, such as train journeys, on top of the mileage rate.

What to record

HMRC asks you to keep records of your business miles, and the flat rate is only as good as the log behind it. For each business journey, note the date, where you started and where you went, the business reason and the miles. A log written as you go is far easier to defend than one rebuilt at the end of the year.

The UK tax year runs from 6 April to 5 April. The online Self Assessment return for 2026/27 is due by 31 January 2028.

Sources

• GOV.UK — Increase to approved mileage allowance payments and self-employed simplified mileage rates (published 17 June 2026)
• GOV.UK — Simplified expenses if you're self-employed: vehicles
• legislation.gov.uk — Taxation (Energy and Vehicles) Act 2026 (Royal Assent 15 July 2026)

Facts checked against the official sources on October 27, 2026. This article is general information, not tax advice. Rules change — confirm with the tax authority or an accountant before you file.