Business Mileage Calculator, 2026/27

How this is calculated

HMRC's Approved Mileage Allowance Payments let employers reimburse business mileage tax-free up to set rates. For cars and vans this is £0.55 per mile for the first 10,000 miles in the tax year, dropping to £0.25 per mile after that, regardless of the car's engine size or fuel type.

Motorcycles are reimbursed at a flat £0.24 per mile with no mileage threshold, and bicycles at £0.20 per mile. A passenger who is also an employee travelling on the same business journey can be reimbursed an extra £0.05 per mile, tax-free.

The calculator multiplies your annual business mileage by the relevant rate, applying the reduced rate to any miles above the 10,000 mile threshold for cars and vans, then compares that approved figure against what you say your employer actually pays.

What happens if the amounts do not match

If your employer pays less than the approved rate, or nothing at all, you can claim Mileage Allowance Relief from HMRC for the shortfall, usually through your self-assessment return or a form P87 if you do not otherwise need to file a return.

If your employer pays more than the approved rate, the excess is treated as a taxable benefit and should be reported on a P11D, with tax and Class 1A National Insurance due, so consistently overpaying mileage without adjusting for this can create unexpected liabilities at year end.

Director and company considerations

For a limited company, reimbursing directors and employees at or below the approved rates is a straightforward, fully deductible business expense with no payroll reporting needed, which makes it one of the simplest ways to extract value from the business tax efficiently.

Keeping a mileage log with dates, destinations and business purpose is essential, since HMRC can ask for evidence of the journeys claimed, particularly where mileage claims form a significant part of a director's overall remuneration.

What is the approved mileage rate for a car in 2026/27?

£0.55 per mile for the first 10,000 business miles in the tax year, then £0.25 per mile after that, regardless of the car's engine size, fuel type or whether it is electric.

Can I claim mileage if I use my own electric car?

Yes. The same approved mileage rates apply to electric, hybrid and petrol or diesel cars; HMRC does not currently operate a separate mileage rate for electric vehicles used privately for business trips.

What if my employer pays less than the approved rate?

You can claim Mileage Allowance Relief for the difference between what you were paid and the approved rate, usually via your self-assessment return or a P87 form if you do not already file a return.

Do I need to keep records?

Yes. HMRC expects a mileage log recording the date, destination, purpose and mileage of each business journey, since this is the evidence needed to support both employer reimbursements and any personal tax relief claim.