14 August 2026
With HMRC introducing updated mileage rates from 6 April 2026, many businesses, employees, and self-employed individuals are asking what has changed and how it affects them.
What are the HMRC mileage rates for 2026/27?
From 6 April 2026, HMRC has increased its approved mileage rates for cars and vans:
- 55p per mile (first 10,000 business miles)
- 25p per mile (over 10,000 miles)
This is the first increase in over 10 years, reflecting rising motoring costs.
Who Does This Affect?
This update applies to:
- Employees using their own vehicles for work
- Employers reimbursing staff mileage
- Sole traders and self-employed individuals using simplified expenses
Why Does It Matter?
For Employees:
- You can now receive higher tax-free mileage payments
- If your employer pays less than HMRC rates, you may claim tax relief on the difference
For Employers:
- Updating mileage rates ensures tax efficiency and compliance
- Prevents unnecessary employee tax claims
- Supports fair reimbursement in line with rising costs
What Could This Mean in Practice?
If you drive 8,000 business miles:
- Old rate (45p): £3,600
- New rate (55p): £4,400
*That’s an extra £800 tax-free under the new rules.
What are advisory fuel rates and how do they differ?
It’s important not to confuse AMAPs with Advisory Fuel Rates (AFRs).
- AMAPs – apply to personal vehicles
- AFRs – apply to company cars only
AFRs are updated quarterly and reflect fuel cost changes.
What Should You Do Now?
We recommend that you:
- Review and update your mileage reimbursement policies
- Ensure payroll systems reflect the new rates
- Keep accurate mileage records
Need help?
If you need assistance implementing these changes or reviewing your expenses, Morrissey Chartered Accountants are here to help, contact us on 028 4461 7130.