17/06/2026
Did you know that business mileage can be reimbursed through your payroll, tax-free, when it's done properly?
From 6 April 2026, HMRC increased the Approved Mileage Allowance Payment (AMAP) rate for cars and vans for the first time since 2011.
Here are the key facts every employer and director should know:
Mileage can be paid through payroll for business journeys (not commuting).
HMRC's approved mileage rates from 6 April 2026 are:
For cars and vans:
55p per mile for the first 10,000 business miles in a tax year (up from 45p)
25p per mile after that (unchanged)
Other rates, all unchanged:
- Motorcycles: 24p per mile
- Bicycles: 20p per mile
- Passenger payments: 5p per mile per qualifying passenger on the same business trip
These rates apply to employees and directors using their own vehicle. When paid at or below HMRC's approved rates, there's:
- no income tax
- no national insurance
You must keep records showing:
- date of journey
- purpose of the trip
- miles travelled
If you pay more than the approved rates, the excess becomes taxable.
If you pay less (or nothing), the employee or director can usually claim Mileage Allowance Relief from HMRC for the shortfall.
The 10,000 mile threshold resets every tax year on 6 April, and it's per person, not per employer — so if someone changes jobs mid-year, their cumulative business miles carry across.
This is one of those areas where small, regular claims add up over the year, but only if it's set up correctly and recorded properly.
If you're not sure whether you're claiming mileage in the most tax-efficient way, it's worth a check. It's a simple fix that often gets missed.
