The approved rates
When you use your own vehicle for business journeys, your employer can pay you up to the approved mileage allowance without tax or National Insurance. For the 2026-27 tax year the rate for cars and vans is 55p a mile for the first 10,000 business miles and 25p a mile after that. From 2011-12 to 2025-26 the first-10,000-miles rate was 45p. Motorcycles are 24p a mile and bicycles 20p.
What counts as business travel
Business journeys are trips you make for work, such as visiting a client or travelling to a temporary workplace. Your normal commute between home and your permanent workplace does not count.
If your employer pays less
If your employer pays less than the approved amount, or nothing, you can claim Mileage Allowance Relief from HMRC on the difference. The relief reduces your taxable income, so a basic-rate taxpayer gets back 20% of the difference, not the whole amount. For example, 12,500 business miles in 2026-27 gives an approved amount of £6,125. If your employer pays 35p a mile, which is £4,375, the difference is £1,750, and relief at 20% is worth £350.
If your employer pays more
Anything paid above the approved amount is taxable and must be reported.