What mileage rate can I claim for business travel in 2025/26?

The HMRC Approved Mileage Allowance Payments (AMAP) rates have been unchanged since April 2011 despite significant increases in the cost of running a vehicle. For 2025/26 the rates remain: 45 pence per mile for cars and vans for the first 10,000 business miles in the tax year; 25 pence per mile for cars and vans for every mile beyond 10,000; 24 pence per mile for motorcycles; and 20 pence per mile for bicycles.

These rates apply in two distinct situations. First, if you are an employee or company director and use your own personal vehicle for business journeys, your employer (or your own company) can reimburse you up to these rates completely tax-free and National Insurance-free. Second, if you are self-employed and use your own vehicle for business, you can claim these amounts as a deductible expense on your Self Assessment return using the simplified mileage method.

The 10,000-mile threshold resets at the start of each tax year on 6 April. All business mileage in a year is counted together, regardless of whether you have multiple employers or clients.

For company directors, the most common approach is to claim mileage reimbursement from your own limited company. The company pays you the AMAP rate for business miles driven in your personal vehicle. This is deductible for the company against Corporation Tax, is tax-free in your hands, and attracts no National Insurance. This is more tax-efficient than simply taking additional salary.

To claim through your company, you raise a mileage claim against the company, which pays you the reimbursement. The company records this as a travel expense. You do not need to report it on your personal Self Assessment unless the company reimburses you above the AMAP rate, in which case the excess is a taxable benefit.

If your company reimburses you at less than the AMAP rate, for example 30 pence per mile, you can claim the shortfall (15 pence per mile at standard rate) as an employment expense on your Self Assessment return on the employment pages. This is called Mileage Allowance Relief (MAR).

For sole traders and self-employed individuals, using the mileage method means you cannot also claim the actual running costs of the vehicle (fuel, insurance, servicing, depreciation) against the same vehicle in the same period. Once you choose the mileage method for a vehicle, you must stick with it for that vehicle for as long as you use it in the business.

Alternatively, you can use the actual costs method for your vehicle: calculate the total cost of running the vehicle in the year (fuel, insurance, servicing, tyres, MOT, depreciation or HP payments), multiply by the percentage of business use, and claim that amount. This can be advantageous for vehicles with high running costs or low business use percentages. However, the record-keeping burden is higher.

The 10,000-mile threshold is a single threshold per person per tax year, not per vehicle. If you drive two different personal vehicles for business in the same year, the total business miles across both vehicles are counted against the single 10,000-mile threshold.

For passenger payments, if you carry an employee as a passenger in your car on a business journey, your employer can pay you an additional 5 pence per mile tax-free per passenger. This rate has also been unchanged since 2011.

Keep a detailed mileage log recording: the date of each journey, the starting point, the destination, the business purpose of the journey, and the number of miles driven. HMRC expects this level of detail if they question the claim. Odometer readings at the start and end of the year help corroborate the total. Fuel receipts support an actual costs claim but are not strictly required for AMAP claims.

If you drive an electric or hybrid vehicle, the same AMAP rates apply for personal vehicles. However, if your company provides you with a company-owned electric car and you pay for the electricity yourself to charge it, your employer can reimburse you at a rate of 9 pence per mile (the Advisory Electric Rate) without it being taxable.