Mileage rates have just had their first increase in 15 years — and it’s already in effect.
If you use your personal vehicle for business travel, or if you employ people who do, this change matters. The government has raised the approved mileage allowance rate from 45p to 55p per mile, effective from 6 April 2026. Here’s what you need to know and what to do next.
What’s Changed?
The Approved Mileage Allowance Payment (AMAP) rate for cars and vans has increased from 45p to 55p per business mile for the first 10,000 miles in a tax year. Announced via a written ministerial statement on 21 May 2026, this is part of a government package to address rising fuel costs — and it’s the first change to the headline rate since April 2011.
The full rates from tax year 2026–27 are:
| Vehicle | First 10,000 miles | Over 10,000 miles |
|---|---|---|
| Cars and vans | 55p (was 45p) | 25p (unchanged) |
| Motorcycles | 24p (unchanged) | 24p (unchanged) |
| Bicycles | 20p (unchanged) | 20p (unchanged) |
Why Revenue Alone Doesn’t Tell the Full Story
AMAPs are the tax-free amounts that employers can reimburse employees — or that self-employed individuals can claim — for using their own vehicle for business journeys. If you’re reimbursed at or below the AMAP rate, there’s no tax or National Insurance to pay.
The 45p rate had been in place since April 2011, long before fuel prices reached today’s levels. This uplift to 55p better reflects the real cost of running a personal vehicle for work.
Who Does This Affect?
This change is relevant to you if you are:
* An employee who uses your own car, van, or motorcycle for business trips and is reimbursed by your employer
* Self-employed and claiming mileage as a business expense through simplified expenses
* An employer who reimburses staff for business mileage — you may need to review your current policy
What Should You Do Now?
I'm an employee — what does this mean for me?
If your employer reimburses you at less than 55p per mile, you can claim tax relief on the shortfall via Self Assessment. Make sure you’re keeping a mileage log with dates, destinations, and business purpose for every journey.
I'm an employer — do I need to update my expenses policy?
If you’re currently paying 45p per mile, now is a good time to update your expense policy to the new 55p rate. You can pay above the AMAP rate, but anything over it is liable to tax and NI in the usual way — so it’s worth reviewing your policy carefully.
I'm self-employed — how do I claim the new rate?
If you use the simplified mileage method for your business, you can now claim 55p per mile for the first 10,000 business miles in the 2026–27 tax year. Keep a detailed mileage log and make sure your records clearly separate business and personal travel.
When does this take effect?
The new 55p rate applies from 6 April 2026. It is already in effect for the current 2026–27 tax year, so you can start claiming or reimbursing at the new rate immediately for any business mileage since that date.
Need Help Making the Most of This Change?
If you have any questions about how the new mileage rate affects your tax position, expenses policy, or Self Assessment return, get in touch with your Nuvo adviser. We’re here to make sure you’re claiming every allowance you’re entitled to.
