Question 1

What are the HMRC approved mileage rates for 2025/26?

Accepted Answer

Cars and vans: 45p per mile for the first 10,000 business miles in the tax year, then 25p per mile above that. Motorcycles: 24p per mile (flat rate, all miles). Bicycles: 20p per mile (flat rate, all miles). These rates are set by HMRC and have been unchanged for a number of years.

Question 2

What counts as a business mile?

Accepted Answer

Business miles include travel between workplaces, visits to clients or customers, travel to temporary workplaces (sites you attend for fewer than 24 months), and business-related errands. Your regular commute from home to your permanent workplace does NOT count. However, if you are self-employed and work from home as your main base, journeys to visit clients generally do qualify.

Question 3

My employer pays me less than HMRC rates — can I claim the difference?

Accepted Answer

Yes. If your employer reimburses you at a rate below the HMRC approved rate, you can claim Mileage Allowance Relief (MAR) on the shortfall via your Self Assessment tax return (or a P87 form if you do not file Self Assessment). The relief is worth the shortfall multiplied by your marginal income tax rate — 20% for basic rate, 40% for higher rate, 45% for additional rate taxpayers.

Question 4

My employer pays more than the HMRC rate — is that a problem?

Accepted Answer

Anything your employer pays above the HMRC approved rate is treated as taxable employment income and must be reported on your P11D. You will owe income tax and National Insurance on the excess. Most employers deliberately stay at or below the HMRC rate to avoid this.

Question 5

What records do I need to keep for mileage claims?

Accepted Answer

HMRC requires you to record: the date of each journey, the start and end location, the business purpose of the trip, and the number of miles driven. A mileage log (paper diary, spreadsheet, or app) is essential. Keep records for at least 5 years after the 31 January Self Assessment deadline for the tax year in question.

Question 6

What is the passenger supplement?

Accepted Answer

If you carry a fellow employee as a passenger on the same business journey, your employer can pay you an additional 5p per mile per passenger completely tax-free. This is in addition to the standard HMRC approved rate. For example, if you give two colleagues a lift on a 100-mile business trip, your employer can pay up to £10 extra (2 passengers × 100 miles × 5p) on top of the normal mileage payment.

Question 7

Can I claim mileage allowance if I am self-employed?

Accepted Answer

Yes. Self-employed individuals can use the simplified expenses mileage rates (the same HMRC approved rates above) instead of claiming actual vehicle costs. This method is simpler and you do not need to apportion running costs. Once you have used simplified expenses for a vehicle in your business, you must continue to do so for as long as you use that vehicle in the business.

Mileage Allowance Calculator 2025/26 — HMRC Approved Rates

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