Employers can pay HMRC’s approved payments to reimburse employees using their own vehicle for business travel – the Approved Mileage Allowance Payments (AMAPs). They have been under review since March 2026 and now we have the change, backdated to the start of the tax year.
On 25 March 2026, HM Treasury announced a ‘worker's first’ review of the Approved Mileage Allowance Payments (AMAP) rates unchanged since April 2011. The results of the review can be seen at the following:
The announcement that the review has resulted in ‘a 10p per mile increase in tax free mileage rates’ is not correct. The only change, albeit significant, is the rate applicable to the first 10,000 miles, increasing from 45p to 55p with effect from tax year 2026/27. The full rates are as follows:
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Vehicle type
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First 10,000 business miles in the tax year
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Each business mile over 10,000 in the tax year
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Cars and vans
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55p
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25p
|
|
Motor cycles
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24p
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24p
|
|
Bicycles
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20p
|
20p
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The rules for passenger payments (5p) remain unchanged.
The changes to 55p from 45p impacts reimbursements that have already been made.
For Bookkeepers
ICB urges members to communicate the changes to clients and suggest they revise the reimbursements. Note that the announcement also applies to the rate for:
- Mileage Allowance Relief (MAR) – this is where an employee can make a claim for Income Tax relief if, maybe, the employer does not reimburse at 55p (or does not make a retrospective adjustment mid-year to a change applying from the start of the tax year). Income Tax relief on 55p and approved reimbursement at 55p are not the same thing; and
- Tax relief for the self-employed via Self-Assessment – where the new rates can be used for tax year 2026/27, due by 31 October 2027 (paper) or 31 January 2028 (online)
