News
New Mileage Allowance Rates Confirmed – What You Need to Know
22 May 2026
Chancellor Rachel Reeves has announced increases to Approved Mileage Allowance Payments (AMAPs), Mileage Allowance Relief (MAR) and self-employed mileage rates — the first change to these figures in 15 years.
The new rates apply from 6 April 2026, backdated to the start of the 2026–27 tax year.
What are the new rates?
The updated approved mileage rates are:
- 55p per mile for the first 10,000 business miles (increased from 45p)
- 25p per mile for every mile above 10,000 (unchanged)
What does this mean for employers?
If your business reimburses employees for business mileage, you should review your current reimbursement policy in light of these changes. Where employees have been paid at the previous rate since 6 April 2026, you may wish to consider backdating the uplift through payroll to bring payments in line with the new AMAP rate.
Where an employee is reimbursed below the new approved rate, you may wish to adjust your payroll to make up the difference. Alternatively, employees are able to claim tax relief on the shortfall directly through HMRC using the guidance on claiming tax relief for job expenses. Please note that HMRC is currently updating the relevant claim forms to reflect the new mileage rates — we will share details once these are available.
Please note that HMRC is currently updating the relevant claim forms to reflect the new mileage rates. We will share details once these are available.
What does this mean for the self-employed?
If you are self-employed and use the simplified mileage method, you will be able to apply the new rates when completing your 2026–27 Self Assessment tax return. The deadlines for filing remain:
- 31 October 2027 for paper returns
- 31 January 2028 for online filing
What should you do now?
We recommend reviewing your mileage reimbursement processes as soon as possible. If you are self-employed, make a note of the new rates to apply when you complete your next tax return.
If you have any questions about how these changes affect your business or personal tax position, please get in touch with our payroll team payroll@wrpartners.co.uk or call 01606 654450, we are happy to help.
