- Approved mileage rate: 45p/mile for first 10,000 miles, then 25p/mile
- Threshold resets annually: 6 April each year
- Payments at approved rate: no income tax, no NI for you; fully CT-deductible for company
- Commuting to a permanent workplace does NOT count as business mileage
- Personal electric car: same 45p/25p rates apply — not the lower advisory electricity rate
HMRC approved mileage allowance payment (AMAP) rates 2026-27
| Vehicle type | First 10,000 miles | Above 10,000 miles |
|---|---|---|
| Car or van (petrol, diesel, hybrid, or electric) | 45p per mile | 25p per mile |
| Motorcycle | 24p per mile | 24p per mile |
| Bicycle | 20p per mile | 20p per mile |
These rates have been unchanged since 2011 and remain at 45p/25p for 2026-27. The 10,000-mile threshold resets each tax year on 6 April.
What counts as business mileage?
Business mileage for AMAP purposes means travel in the performance of duties — not commuting to a regular workplace. The key distinction:
| Journey type | Business mileage? | Example |
|---|---|---|
| Home to temporary client site | Yes | Visiting a client you don't attend regularly |
| Home to permanent workplace | No — ordinary commuting | Driving to your own rented office |
| Between two client sites | Yes | Travelling from one project location to another |
| Permanent workplace to client site | Yes | Leaving your office to visit a client |
| Home to conference (one-off) | Yes | Attending an industry conference |
Home-working directors: If your home is your main place of work (no permanent external office), client site visits are temporary workplaces and all related mileage is claimable. This is the position for most sole directors working primarily from home — the full 45p/mile applies to every business journey.
How to claim mileage from the company
Keep a contemporaneous mileage log — recorded at or near the time of travel, not reconstructed weeks later. Each entry should capture:
- Date of journey
- Business purpose (e.g., "client meeting at Acme Ltd, London")
- Start location
- End location
- Miles driven
Submit an expense claim to the company periodically (monthly or quarterly). The company pays the mileage reimbursement. This payment is tax-free for you — no PAYE, no NI — and fully deductible for the company.
Worked example: mileage calculation for the year
| Mileage band | Miles | Rate | Reimbursement | CT saving at 19% |
|---|---|---|---|---|
| First 10,000 miles | 8,500 | 45p | £3,825 | £727 |
| Above 10,000 miles | 0 | 25p | £0 | £0 |
| Total | 8,500 | £3,825 | £727 |
You receive £3,825 tax-free. The company deducts £3,825 from taxable profit — saving £727 in CT at 19%.
Paying above or below the approved rate
| Company pays | Tax consequence |
|---|---|
| Exactly at the approved rate (45p/25p) | No tax, no NI, no reporting needed |
| Above the approved rate | Excess is a taxable benefit-in-kind — reported on P11D, income tax and Class 1A NI apply |
| Below the approved rate | You can claim the difference as a tax deduction on your Self Assessment return (Mileage Allowance Relief) |
| Nothing (zero reimbursement) | You claim Mileage Allowance Relief on your Self Assessment for the full approved amount |
Electric vehicles: personal vs company-owned
There is an important distinction depending on who owns the vehicle:
| Vehicle ownership | Rate to use | Notes |
|---|---|---|
| Personally-owned electric car | 45p/25p (AMAP rates) | Same as petrol — despite lower fuel cost |
| Company-owned electric car | 9p/mile (Advisory Electricity Rate) | For recharging at home — updated quarterly by HMRC |
For a personally-owned electric vehicle, you claim at the full 45p/25p AMAP rate regardless of actual electricity cost — the approved rate compensates for depreciation, maintenance, and running costs, not just fuel. This means personally-owned EVs often generate a surplus (actual cost is much lower than 45p/mile) that effectively reduces the cost of private motoring.
Passenger rate
If you carry a fellow employee (not a client) in your car on a business journey, the company can additionally pay 5p per mile per passenger — tax-free on top of the mileage rate. Rare for sole directors but worth knowing.
Mileage apps
Manual logs work fine for HMRC, but apps like MileIQ, Driversnote, or TripLog can automate the record-keeping using GPS. They log journeys automatically and allow you to categorise them as business or personal. The digital log is accepted by HMRC and makes year-end reporting and expense claims significantly faster.
Common mistakes
- Claiming commuting mileage: travel from home to a regular office is never business mileage — HMRC is alert to this
- Not keeping contemporaneous records: reconstructing a mileage log at year-end from memory is unreliable and will be challenged
- Using the advisory electricity rate for a personal EV: the 9p AER applies to company-owned EVs only — personal EVs use 45p/25p
- Forgetting the threshold reset: the 10,000-mile limit resets every 6 April — if you're a high mileage driver, track where you are in the year
Use the calculator
Frequently asked questions
Can my company pay more than 45p/mile?
Do I need a GPS log or will a manual record do?
What if my company owns the car?
Can I claim mileage for travel to a networking event?
My client is on the same business park as another company I visit regularly. Is it one permanent workplace or two separate temporary workplaces?
Important: This guide is for general information only and does not constitute tax or legal advice. Tax rules change — always verify current rates and thresholds with HMRC or a qualified accountant before making decisions.