Paid less than 55p a mile? Claim the tax relief

By Bradley

Published 3 November 2026

Last updated 3 November 2026

If you use your own car for work and your employer pays you less than HMRC’s approved rate, you can claim tax relief on the shortfall.

From 6 April 2026 that approved rate is 55p a mile for the first 10,000 business miles, up from 45p. It’s the first rise since 2011.

Which means the gap between what a lot of employers pay and what HMRC says the journey is worth just got 10p a mile wider.

The rate went up, so the relief went up with it

Vehicle	First 10,000 business miles	Each mile over 10,000
Cars and vans	55p (was 45p)	25p
Motorcycles	24p	24p
Bicycles	20p	20p

Your employer doesn’t have to pay you mileage

I’ll say this plainly because it comes up every time.

There’s no law requiring an employer to reimburse business mileage, and none requiring 55p if they do. The 55p is simply the most they can pay you without it being taxed.

What you get is down to your contract and their expenses policy. Where that falls short of the approved rate, the tax relief is how you recover part of the difference.

Part of it, not all of it. Worth being clear about that before anyone gets their hopes up.

What counts as business mileage

Travel between workplaces, out to clients or suppliers, and to a temporary workplace, which broadly means somewhere you expect to be for no more than 24 months.

Your normal commute never counts. Home to your usual place of work is your own cost, even if you take a work call on the way.

If you’re on site for a long contract, the 24-month point is worth watching. Cross it and the journeys stop qualifying.

What it’s worth

The relief is called Mileage Allowance Relief. It’s the difference between HMRC’s approved amount for your business miles and what your employer actually paid you.

Sarah, 12,000 miles at 35p

Sarah drives 12,000 business miles in her own car over 2026-27. Her employer pays 35p a mile.

Approved amount, 10,000 miles at 55p	£5,500
Approved amount, 2,000 miles at 25p	£500
Total approved amount	£6,000
Less paid by employer, 12,000 at 35p	(£4,200)
Mileage Allowance Relief to claim	£1,800

Here’s the bit people misread. That £1,800 isn’t a cheque. It comes off her taxable income.

At basic rate Sarah is £360 better off. At higher rate it’s £720.

Still worth having for an hour’s paperwork.

If your employer pays nothing at all, you claim on the whole approved amount, £6,000 in Sarah’s case. The one exception is passengers. If your employer doesn’t pay the 5p passenger rate, you can’t claim relief for it.

And if you get a flat monthly car allowance with no per-mile payment, the same applies. The allowance is taxed as salary and you claim on your business miles at the full approved rates.

When there’s nothing to claim

Two situations where you can stop reading.

If your employer already pays 55p and 25p, you’ve had the full approved amount and there’s no relief left to claim. Nothing has gone wrong, there’s just nothing in it for you.

If they pay more than that, the excess is taxable pay. It should be showing on your P11D or in your tax code, and if it isn’t, that’s worth a question rather than a claim.

And if your employer fuels the car or reimburses your petrol receipts separately, you can’t claim mileage on top. It’s one or the other.

How to claim

If your allowable expenses for the year come to less than £2,500 and you don’t file a tax return, use HMRC’s online service or form P87. HMRC normally adjusts your tax code for the current year and refunds the earlier ones.

If the claim is £2,500 or more, or you already file a Self Assessment return, it goes on the return.

You can go back four years as well as the current year, so in 2026-27 you can still pick up 2022-23. That one closes on 5 April 2027.

Bear in mind the older years use the old 45p rate, not 55p. The 55p only applies from 6 April 2026 onwards. A backdated claim is still usually worth making, it’s just worth less per mile than this year’s.

If HMRC gives you the relief through your tax code, check the coding notice when it arrives. They’ll often assume you’ll do the same mileage next year and build it in, which is fine while it’s true and an underpayment waiting to happen when you change jobs or stop driving.

Keep a log for every journey. Date, start and end postcode, purpose, miles, plus what your employer paid you. HMRC asks to see them more often than people expect, and a reconstruction from bank statements isn’t the same thing.

One change worth waiting for

From 6 April 2027 the rate above 10,000 miles rises from 25p to 35p, and the 55p becomes permanent rather than temporary.

If you drive well past 10,000 business miles a year, your claim gets bigger from that date. Run Sarah’s 2,000 extra miles at 35p instead of 25p and her approved amount goes to £6,200.

Nothing to do about it now. Just don’t assume this year’s figure is next year’s figure.