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ExpensesUpdated 2026-02-12

What is the mileage allowance?

Quick Answer

The Approved Mileage Allowance Payment (AMAP) is 45p per mile for the first 10,000 business miles and 25p per mile thereafter. This covers fuel and running costs.

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Detailed Explanation

HMRC Approved Mileage Rates 2024/25

Cars and vans: - First 10,000 miles: 45p per mile - Over 10,000 miles: 25p per mile

Motorcycles: - All miles: 24p per mile

Bicycles: - All miles: 20p per mile

What the rate covers

- Fuel - Insurance - Depreciation - Servicing and repairs - Road tax

What it doesn't cover (claim separately)

- Parking fees (fully claimable) - Congestion charges (for business trips) - Tolls (for business trips)

How to claim

1. Keep a mileage log: date, from, to, purpose, miles 2. Calculate total business miles for the year 3. Apply the rates above 4. Company pays you the amount or reimburses expenses 5. Deductible for Corporation Tax

Example

12,000 business miles in a year: - First 10,000 x 45p = £4,500 - Next 2,000 x 25p = £500 - Total claimable: £5,000

Using company car instead

If the company owns the vehicle, you cannot claim mileage allowance. The company claims actual costs, and you pay Benefit in Kind tax.

Source: HMRC Mileage Allowance Rates

Real-World Examples

Claiming Mileage for Client Visits

Sarah, a director of a marketing agency, drives 12,000 business miles in her car during the 2024/25 tax year visiting clients. She can claim 45p per mile for the first 10,000 miles (£4,500) and 25p per mile for the remaining 2,000 miles (£500), totalling £5,000.

Motorcycle Use for Business

David uses his motorcycle for deliveries for his catering business. He clocks up 5,000 business miles in a year. He can claim 24p per mile, resulting in a total mileage allowance of £1,200.

Cycling for Short Business Trips

Emily cycles to meet clients and suppliers in her local area. She records 800 business miles on her bicycle. She can claim 20p per mile, giving her a total claimable mileage allowance of £160.

Common Mistakes to Avoid

  • Forgetting to keep a detailed mileage log, which is crucial for HMRC compliance.
  • Claiming mileage for journeys that are considered ordinary commuting (travel between home and a permanent workplace).
  • Incorrectly calculating the total mileage, particularly when the total business miles exceed 10,000, leading to over or underclaiming.
  • Claiming for personal mileage, which is not permitted and could lead to penalties.

What happens if my company reimburses me less than the AMAP rates?

You can claim the difference as an allowable expense, reducing your taxable profit. For example, if your company pays you 30p per mile for the first 10,000 miles, you can claim the remaining 15p per mile (45p - 30p) as an expense on your tax return.

Can I claim for mileage if I use a company car?

The AMAP rates do *not* apply to company cars if the company pays for the fuel. If you pay for the fuel yourself in a company car, different advisory fuel rates (AFR) apply, published by HMRC, which vary depending on the engine size and fuel type.

How does claiming mileage allowance affect my personal tax?

If you're reimbursed at the AMAP rate, it's not taxable as it's considered reimbursement, not income. If you are reimbursed at a higher rate than AMAP, the difference is treated as taxable income subject to PAYE and National Insurance Contributions.

Are there any changes expected to the mileage allowance rates in the 2025/2026 tax year?

The AMAP rates are reviewed periodically by HMRC, but as of the current information, there are no announced changes for the 2025/2026 tax year. Always refer to the official HMRC website for the most up-to-date information.

Practical Tips

  • Use a mileage tracking app or spreadsheet to accurately record your business miles, including dates, destinations, and purpose of each journey.
  • Review your mileage log regularly (e.g., monthly) to ensure accuracy and identify any potential errors before submitting your expense claims.
  • Keep fuel receipts, even though you can't claim them directly as an expense if claiming AMAP, as they can help corroborate your mileage log if HMRC queries it.
  • Clearly differentiate between business and personal mileage to avoid accidental overclaiming and potential penalties from HMRC.

Related Questions

Can I buy a car through my company?

Yes, but if you use it personally, you'll pay Benefit in Kind (BIK) tax based on the car's list price and CO2 emissions. Electric cars have the lowest BIK (2% in 2024/25).

What expenses can I claim through my company?

You can claim expenses that are 'wholly and exclusively' for business purposes. This includes travel, equipment, professional subscriptions, training, marketing, and business insurance.

How do I track mileage for business expenses?

Record the date, start/end locations, purpose of trip, and miles driven for every business journey. Use a mileage tracking app or spreadsheet, and keep records for 6 years.

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