Chancellor Rachel Reeves has announced an increase in approved mileage rates for the 2026 – 2027 tax year.
For the first time since 2011, you can now claim 55p for the first 10,000 miles, an increase in 10p per mile.
If you drive your own car (not a company car) for business journeys, you can claim the mileage allowance which is both free from tax and national insurance. The allowance is being backdated to the beginning of the tax year, 6th April 2026.
The rate for business miles over 10,000 remains at 25p and there has been no change to the rates for motorcycles or bicycles.
| Vehicle | First 10,000 business miles in the tax year | Business miles over 10,000 in the tax year |
| Cars and vans | 55p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
If you use your own personal vehicle for work or business journeys, you can claim the approved mileage allowance. This can be claimed online through HMRC or through your self-assessment if you complete one.
The mileage allowance covers the costs associated with using your personal vehicle for business purposes such as fuel, insurance, tax, MOT’s, repairs, and general wear and tear. You cannot claim these costs separately.
There are different rules for company cars, get in touch now to discuss.
https://www.gov.uk/tax-relief-for-employees/vehicles-you-use-for-work