Complete guide to UK mileage allowances

Everything you need to know about HMRC approved mileage rates, what counts as business mileage, record-keeping requirements and common mistakes to avoid.

What are AMAP rates

Approved Mileage Allowance Payments (AMAP) are HMRC's official rates for reimbursing employees and the self-employed for business journeys in their own vehicles. If you're reimbursed at or below AMAP rates, the payment is tax-free. No Income Tax, no National Insurance.¹

The rates are designed to cover all running costs: fuel, insurance, servicing, tyres, depreciation and Vehicle Excise Duty. You don't claim individual running costs on top of mileage allowance.

Current AMAP rates (2026-27)

The 10,000-mile threshold applies to cars and vans only, and resets each tax year (6 April to 5 April).¹

What counts as business mileage

Business mileage is travel wholly and exclusively for business purposes. This includes:

Journeys that qualify

• Home to client site
• Office to client site
• Client site to client site
• Home or office to temporary workplace (maximum 24 months at same location)
• Travel to business meetings, conferences, training events
• Travel to suppliers or trade shows

Journeys that don't qualify

• Home to permanent workplace (this is commuting)
• Personal errands during work day
• Detours for personal reasons

The distinction between temporary and permanent workplace matters. A temporary workplace is one you attend for a limited period or purpose (HMRC says up to 24 months). If you visit the same client site every day for three years, that becomes a permanent workplace and travel there is commuting.²

How to claim mileage allowance

If you're self-employed

You claim mileage allowance on your Self Assessment tax return (SA103F for self-employment). Multiply your business miles by the AMAP rate and enter the result in the "motoring expenses" section. You cannot claim actual vehicle costs (fuel receipts, insurance) if you're using mileage allowance.³

If you're an employee

If your employer reimburses you at AMAP rates or below, there's nothing more to do. The reimbursement is tax-free.

If your employer pays less than AMAP rates, you can claim tax relief on the difference. For example, if you drove 4,000 business miles and your employer paid 30p per mile, you're entitled to £2,200 (4,000 × 55p) but received £1,200. Claim relief on the £1,000 shortfall via Self Assessment or P87 form.⁴

If your employer pays more than AMAP rates, the excess is taxable income.

If you're a limited company director

The company reimburses you at AMAP rates for business journeys in your personal vehicle. The payment is a business expense for the company (reduces Corporation Tax) and is tax-free for you. Keep a mileage log as proof.

Record-keeping requirements

HMRC expects contemporaneous records. That means you record the journey soon after it happens, not six months later when preparing your tax return. Keep records for at least 5 years after the 31 January Self Assessment deadline.⁵

What to record

• Date of journey
• Start location (postcode sufficient)
• End location
• Purpose (client name or meeting type)
• Miles travelled

How to record

A simple spreadsheet works. Dedicated mileage apps (MileIQ, Driversnote) can automate tracking using GPS, but you'll still need to categorise trips as business or personal.

Many accountants recommend keeping a separate note of your vehicle's odometer reading at the start and end of the tax year to prove total mileage matches your log.

Passenger payments

You can claim an additional 5p per mile for each business passenger you carry, up to a maximum of 4 passengers. This means a maximum extra 20p per mile.¹

Example: you drive 50 miles to a client meeting with two colleagues in the car. You claim 55p × 50 miles = £27.50 for yourself, plus 5p × 50 miles × 2 passengers = £5. Total claim: £32.50.

The passengers must be employees of your business or fellow directors. You can't claim passenger payments for family members unless they work for your business.

Electric vehicles and AMAP

Electric vehicles use the same AMAP rates as petrol and diesel cars: 55p/25p per mile. HMRC does not differentiate by fuel type. This makes electric vehicles particularly attractive for high-mileage business users because running costs are lower but the reimbursement rate is the same.¹

If you charge an electric company car at home, you can claim 9p per mile for electricity (this is in addition to AMAP if you own the vehicle personally, but replaces it if the company owns the vehicle).⁶

When not to use mileage allowance

If your vehicle costs are unusually high (e.g., expensive lease payments, high insurance for young drivers), you might be better off claiming actual costs rather than mileage allowance. You cannot use both methods in the same tax year; choose one at the start of the year and stick with it.³

To claim actual costs, keep receipts for fuel, insurance, servicing, repairs, Vehicle Excise Duty and finance interest. If you use the vehicle for personal journeys, apportion costs based on business mileage as a percentage of total mileage.

Most sole traders and contractors find mileage allowance simpler and just as beneficial.

Common mistakes to avoid

Claiming commuting as business mileage

Home to your regular office is not business mileage. If you work at the same location every day, that's your permanent workplace. Travel there is commuting, which is a personal expense.

Forgetting the 10,000-mile threshold

Many people claim 55p for all miles. After 10,000 miles in a tax year, the rate drops to 25p for cars and vans. If you drive 15,000 business miles, you claim (10,000 × 55p) + (5,000 × 25p) = £5,500 + £1,250 = £6,750, not 15,000 × 55p = £8,250.

Mixing mileage allowance with actual costs

You can't claim 55p per mile and also deduct fuel receipts. It's one or the other. Mileage allowance is designed to cover all running costs.

Not keeping contemporaneous records

HMRC can reject claims if you reconstruct a mileage log months later. Record journeys as you make them.

Car rate (first 10,000 miles)

55p per mile

Passenger rate

5p per mile (max 4 passengers)

Record retention period

5 years