HMRC Mileage Rates 2026: Everything You Need to Know

Published 15th February 2026

If you're using your own car for work journeys, you're entitled to claim money back. It's that simple. HMRC sets approved mileage rates that are meant to cover fuel, wear and tear, insurance, depreciation -- the lot. Whether you're employed, self-employed, or a company director, these rates apply. And the amounts aren't trivial. We're talking hundreds or thousands of pounds a year for anyone doing regular business miles.

Here's the full breakdown of the 2025/26 rates, who can claim, and how to actually get the money.

Current HMRC Mileage Rates for 2025/26

Here are the current approved rates:

Vehicle Type	First 10,000 Miles	Over 10,000 Miles
Cars and vans	45p per mile	25p per mile
Motorcycles	24p per mile	24p per mile
Bicycles	20p per mile	20p per mile

Yes, you read those correctly. The car and van rates haven't changed since 2012. The motorcycle and bicycle rates? Unchanged since 2002. That's over two decades. Fuel costs have gone through the roof since then, but HMRC hasn't budged. The AA, the RAC, and various professional bodies have all pushed for an increase. Nothing. It's frustrating, but those are the rates we've got.

How the Two-Tier Rate Works

For cars and vans, there's a split based on how many business miles you do in the tax year (6th April to 5th April):

First 10,000 miles: 45p per mile. The higher rate covers the fixed costs of running a car -- insurance, road tax, depreciation. These costs exist whether you drive 1 mile or 10,000.
Everything above 10,000: 25p per mile. Once the fixed costs are "covered," the rate drops to reflect just the running costs -- fuel, tyre wear, that sort of thing.

Example: If you drive 14,000 business miles in the 2025/26 tax year:
First 10,000 miles at 45p = £4,500
Remaining 4,000 miles at 25p = £1,000
Total claim: £5,500

The threshold resets every April. So 8,000 miles this year and 12,000 next year are calculated separately. You don't carry over unused miles or anything like that.

Electric Vehicles and the Mileage Rate

This is where it gets interesting. EVs get the same 45p/25p rate as petrol and diesel cars. But charging an electric car at home costs roughly 5p to 8p per mile. You're claiming 45p. That's a massive gap in your favour.

Honestly, if you drive an EV for business, the mileage allowance is genuinely generous. You're making money on every mile. Just remember: if you're using the mileage rate, you can't also claim separately for electricity costs. It's one or the other.

Important: If you charge your electric vehicle at your employer's workplace, this is not treated as a taxable benefit in kind. Your employer can provide free workplace charging without affecting your tax position.

Motorcycles: 24p Per Mile

Flat rate. 24p per mile whether you do 500 miles or 15,000. No threshold, no drop-off. If you're self-employed and your actual running costs are higher than 24p per mile (entirely possible with bigger bikes), you might be better off claiming actual expenses instead. Worth running the numbers both ways.

Bicycles: 20p Per Mile

20p per mile for cycling to business meetings. No fuel to pay for, obviously, but the rate covers tyre wear, maintenance, chain lube, the occasional new set of brake pads -- all the stuff that adds up. E-bikes qualify too.

With more people cycling in cities and cycle-to-work schemes everywhere, this is becoming a genuinely useful claim for anyone nipping between offices or client sites on two wheels.

Who Can Claim Mileage Allowance?

Employees

If your employer reimburses you at the full HMRC rate, you're sorted -- nothing else to do. But many employers pay less than 45p, or nothing at all. If that's you, claim tax relief on the difference. For claims under £2,500, you can use form P87. Over that, it goes on your Self Assessment. Either way, it's money back in your pocket.

Self-Employed

The mileage allowance method is a godsend if you hate keeping receipts. Instead of tracking every fuel receipt, insurance renewal, and MOT bill, you just multiply your business miles by the rate. Done. For a lot of self-employed people, this works out better than claiming actual costs anyway.

Important: Once you have started using either the mileage allowance method or the actual costs method for a particular vehicle, you must continue using the same method for as long as you use that vehicle for business. You cannot switch between methods from year to year.

Company Directors

If you're a director using your personal car for company business, your company can reimburse you at the approved rates. Up to the approved amount, it's tax-free and NI-free for both you and the company. Pay yourself more than the approved rate though, and the excess becomes taxable. Keep it clean.

Passenger Payments

Giving colleagues a lift to the same meeting? Claim an extra 5p per mile per passenger. It's not much, but it adds up if you're regularly ferrying people around. Only works for passengers travelling for business though -- not your kids in the back seat.

Quick example: 100 miles to a client meeting with two colleagues = 100 x 45p + 100 x 5p x 2 = £55. That extra tenner is yours.

How to Make Your Claim

How you claim depends on your situation:

Employees claiming from their employer: Submit your mileage records to your employer for reimbursement at the approved rates.
Employees claiming tax relief: If your employer pays less than the approved rate, claim the difference through Self Assessment or form P87. You will receive tax relief at your marginal rate (20% for basic rate, 40% for higher rate taxpayers).
Self-employed: Include your mileage allowance claim as a business expense on your Self Assessment tax return.

Use our mileage claim calculator to work out exactly how much you can claim based on your business miles.