The Government has confirmed an increase to the HMRC Approved Mileage Allowance Payment (AMAP) rate from 6 April 2026 for cars and vans from 45p to 55p per mile for the first 10,000 business miles travelled in a tax year where employees use their own vehicles for business travel. The increase will also be relevant for self-employed individuals using HMRC mileage rates to claim business vehicle expenses.
The increase was announced by Chancellor Rachel Reeves in her statement to Parliament on 21 May 2026 and has been backdated to 6 April 2026.
The rate for business mileage above 10,000 miles remains unchanged at 25p per mile.
This is the first increase to the mileage allowance rate since 2011.
The revised rate is intended to reflect rising motoring and fuel costs.
Employees reimbursed below the HMRC approved mileage rate may also be able to claim tax relief from HMRC on the difference, subject to eligibility.
Businesses may wish to consider whether any updates are required to employee mileage reimbursement policies, payroll procedures and expense systems following the updated HMRC rates.
If you would like advice on how these changes affect your business, payroll or employee expense processes, please contact our team.
