HMRC Mileage Rate Rises to 55p a Mile — First Increase in 15 Years

If you use your own car or van for business journeys, there’s good news: HMRC’s approved mileage rate has gone up for the first time in 15 years. From 6 April 2026, the rate for cars and vans rises from 45p to 55p per mile for the first 10,000 business miles in the tax year — a 22% increase.

What’s changed

Vehicle	First 10,000 miles	After 10,000 miles
Cars and vans	55p (was 45p)	25p (unchanged)
Motorcycles	24p (unchanged)	24p
Bicycles	20p (unchanged)	20p

The passenger payment rate (5p per mile for carrying a fellow employee on a business journey) is unchanged. The 45p rate for cars and vans had been frozen since 2011, so this is a significant update given how much fuel, insurance and running costs have risen since then.

Who this applies to

The new rate applies to employees claiming mileage from their employer, employers reimbursing staff, and self-employed sole traders using the simplified mileage method instead of claiming actual vehicle costs. It applies to petrol, diesel, hybrid and electric cars and vans alike.

It’s backdated — so check what’s already been claimed or paid

Because the change applies from 6 April 2026, any mileage since the start of the tax year qualifies at the new 55p rate, even though the announcement only came in May. A few things worth checking:

• Employers who’ve been reimbursing staff at 45p since April can top up the difference tax-free, without it counting as taxable income.
• Employees reimbursed below 55p may be able to claim Mileage Allowance Relief on the shortfall via Self Assessment.
• Sole traders using the mileage method should use 55p per mile for journeys since 6 April 2026 when working out expenses — including in quarterly MTD updates, where this is particularly worth double-checking since the change came mid-year.

See our guide to what expenses sole traders can claim for how mileage fits alongside your other allowable costs.

A word of caution

Many payroll and expense systems still default to the old 45p rate, so it’s worth checking your software or spreadsheet template hasn’t been left on the previous figure — an easy thing to miss mid-tax-year.

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Want your mileage claimed correctly?

If you’re not sure whether you’re claiming the right amount — or you’d simply rather someone else kept on top of it — PBAS handles mileage records and expense claims as part of our bookkeeping service for sole traders across East Lothian, Edinburgh and Scotland. Get in touch for a free, no-obligation chat →

This article provides general guidance only. For official detail see HMRC’s travel, mileage and fuel rates and allowances page, or speak to a qualified bookkeeper.