Business Mileage Rates: Increase from April 2026

A welcome increase for employees, directors and business owners using their own vehicles

For the first time in over 15 years, the approved mileage allowance for business travel has increased.

From 6 April 2026, the rate for employees and directors using their own car for business journeys increased from 45p to 55p per mile for the first 10,000 business miles travelled in a tax year. The rate for mileage above 10,000 miles remains unchanged at 25p per mile.

The change has been widely welcomed by businesses and employees alike, particularly given that the previous 45p rate had remained unchanged since 2011 despite significant increases in fuel, insurance, maintenance and vehicle ownership costs over that period.

Importantly, the new rate applies from the start of the 2026/27 tax year and is therefore backdated to 6 April 2026.

What are Approved Mileage Allowance Payments?

Approved Mileage Allowance Payments (AMAPs) are the rates set by HMRC that employers can pay employees and directors who use their own vehicle for business travel.

The rates are intended to cover the overall cost of using a personal vehicle for work purposes, including fuel, servicing, insurance, road tax, depreciation and general wear and tear.

Business mileage generally includes travel to client meetings, temporary workplaces, site visits and travel between business locations. Ordinary commuting between home and a permanent workplace does not qualify.

The new rates

Only the rate for cars and vans has changed. The updated rates are:

Vehicle	First 10,000 business miles	Over 10,000 business miles
Cars and vans	55p per mile	25p per mile
Motorcycles	24p per mile	24p per mile
Bicycles	20p per mile	20p per mile

What does this mean in practice?

For someone travelling 10,000 business miles each year, the increase equates to an additional £1,000 that can be reimbursed tax efficiently.

For businesses that reimburse staff at HMRC approved rates, the change will increase travel costs. However, for employees and directors who regularly use their own vehicles for work, the increase helps to offset some of the additional costs associated with running a vehicle.

Employers who currently reimburse mileage at rates below the HMRC approved amount may wish to review their mileage policies and consider whether any updates are appropriate.

A reminder to review expense policies

Whilst mileage rates may seem like a relatively small change in isolation, they form part of a wider trend of rising employment and operating costs facing businesses.

Over the last year, many organisations have also had to contend with increases in National Insurance costs, wage pressures, pension obligations and wider compliance requirements. Regularly reviewing expense policies and employee reimbursement arrangements can help ensure they remain fair, competitive and aligned with current HMRC guidance.

Looking ahead

The increase in business mileage rates is a positive development for employees, directors and business owners who use their own vehicles for work. Although many would argue the increase still does not fully reflect the true cost of motoring, it represents the first meaningful update to the approved mileage allowance in more than a decade.

Businesses should ensure their expense policies, payroll systems and mileage claim processes are updated to reflect the new rates and consider whether any backdated claims need to be adjusted for journeys undertaken since 6 April 2026.

If you would like to discuss how the changes affect your business, your employees or your own mileage claims as a director, our team would be pleased to help. Call 01932830664, email enquiries@wardwilliams.co.uk or visit our website www.wardwilliams.co.uk