The HMRC Approved Mileage Allowance Payment (AMAP) rate for cars and vans increased from 45p to 55p per mile for the first 10,000 business miles in a tax year, effective 6 April 2026. This is the first change to the rate since 2011—a 15-year freeze. Employers must update expense policies, payroll systems, and any mileage claims submitted on or after 6 April 2026.
The Approved Mileage Allowance Payment (AMAP) rate is the maximum per-mile amount employers can reimburse employees for using their own private vehicles on business travel without creating a tax liability. HMRC sets this rate; it applies to cars, vans, motorcycles, and bicycles.
Something significant just changed in the UK. For the first time in 15 years, HMRC has updated the rate at which employers can reimburse employees for business miles driven in their own vehicles.
The good news is that this isn’t complicated to handle. But it does need your attention. Here’s a clear, practical breakdown of what’s changed, what the mileage rate increase means, and what to do next.
What is the new HMRC mileage rate for 2026?
HMRC Approved Mileage Allowance Payment (AMAP) rates from 6 April 2026
HMRC updated the approved rates with effect from 6 April 2026. You can view the full published rates on GOV.UK. The key figures are:
| Vehicle type | Previous rate (to 5 Apr 2026) | New rate (from 6 Apr 2026) | Over 10,000 miles |
|---|---|---|---|
| Cars and vans | 45p per mile | 55p per mile | 25p per mile (unchanged) |
| Motorcycles | 24p per mile | 24p per mile (unchanged) | 24p per mile (unchanged) |
| Bicycles | 20p per mile | 20p per mile (unchanged) | 20p per mile (unchanged) |
| Passenger rate | 5p per passenger per business mile (unchanged across all thresholds) | ||
Only the car and van rates below the 10,000-mile threshold have changed. The above-threshold rate of 25p, the motorcycle rate of 24p, and the bicycle rate of 20p are all unchanged. The passenger payment rate—5p per passenger per business mile—also stays the same.
The HMRC AMAP rate for cars and vans increased to 55p per mile from 6 April 2026, the first increase since 2011.
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When did the HMRC mileage rate change?
The new 55p rate applies to all mileage claims dated on or after 6 April 2026 — the start of the 2026/27 tax year. Any claims processed at 45p for journeys made after that date are under-reimbursements. Employers should check whether any April or May 2026 claims have already been paid at the old rate and settle any shortfall promptly.
Why has the rate changed after 15 years?
The 45p rate has been in place since 2011. In that time, fuel prices, vehicle running costs, and inflation have all risen, while the reimbursement rate has remained unchanged. Many employees who regularly drive their own cars for work have quietly been covering a portion of those costs themselves.
The mileage rate increase to 55p reflects a long-overdue recalibration. It’s worth noting that some employers have been voluntarily paying above the AMAP rate for years (which is permitted, though any excess becomes subject to tax and National Insurance). Others have simply continued at 45p without reviewing whether it was still adequate. Either way, the landscape has now changed, and both groups need to act.
How does the mileage rate increase affect payroll and tax?
Tax, National Insurance, and staying compliant
The AMAP rate is the ceiling for tax-free mileage reimbursements. Pay at or below 55p per mile (for the first 10,000 miles), and neither you nor your employee owes tax or National Insurance (NI) on that payment.
Pay above it, and the excess must go through payroll as a taxable benefit. Pay below it, and employees may have grounds to claim Mileage Allowance Relief (MAR) via Self Assessment—but it’s far simpler (and fairer) to just pay the correct amount in the first place.
If your payroll software still calculates mileage payments at 45p for claims dated after 6 April 2026, those payments are under-reimbursements. Your employees have effectively been subsidising their own business travel since the start of the tax year. That’s worth checking sooner rather than later.
Employers who reimburse above the AMAP rate must report the excess as a taxable benefit subject to Income Tax and National Insurance.
Do I need to update my expense policy?
Most organisations have an expense policy that either specifies a mileage rate directly or references HMRC’s approved rate. Either way, it needs reviewing.
A few questions worth working through now:
- Does your policy name a specific rate? If it says 45p, it’s now out of date and should be updated to 55p.
- Does your policy defer to the HMRC rate? Check that the reference is clear and that whoever processes claims knows the rate has changed.
- Do your employees know? People who submit regular mileage claims (especially field-based or remote workers) may have been under-claiming since April. They need to know, and any shortfall should be addressed.
This is also a good prompt to review whether your policy is clear on related rules, such as the 10,000-mile threshold, the lower 25p rate above that threshold, and whether passenger payments are covered. Many organisations haven’t revisited these details in years.
Six things to check before your next payroll run
You don’t need a big project to get on top of the mileage rate increase. But you do need to make sure the right people in your team have actioned each of these points, sooner rather than later, given the change is already backdated to April.
- Update your mileage rate: The new AMAP rate for cars and vans is 55p per mile for the first 10,000 business miles. If your payroll software, expense system, or spreadsheet still shows 45p, change it now for any claim dated 6 April 2026 or later.
- Check for claims you’ve already processed at the old rate: Any mileage reimbursements you’ve made since 6 April at 45p are technically underpayments. Work out the shortfall and settle it. Employees shouldn’t have to chase this.
- Update your expense policy: If your policy names “the HMRC-approved rate”, it needs to be updated.
- Tell your people about the changes to mileage rates: Especially anyone who’s field-based, visits clients, or regularly drives for work. Some of them will have been under-claiming since April without realising it.
- Check your 10,000-mile threshold tracking: The 55p rate applies only to the first 10,000 business miles per employee, per tax year. After that, it drops to 25p. If you’re not tracking cumulative annual mileage per person, you risk over- or under-reimbursing once someone crosses that line.
- Check your payroll reporting: Reimbursements at or below 55p—for the portion under 10,000 miles—are tax- and NI-free. Any payments above the AMAP rate need to run through payroll as a taxable benefit. Make sure your reporting reflects this correctly.
For journeys over 10,000 business miles in a tax year, the AMAP rate for cars and vans drops to 25p per mile.
Keep pace with legislation changes
Staying compliant means keeping up with change, not just ticking a box once and moving on. With developments like the mileage rates increase and changes to SSP, areas that once operated smoothly in the background may now warrant a fresh review.
If you want to stay ahead of legislative changes like this one, Cintra’s payroll legislation hub pulls together the key updates in one place. It’s worth bookmarking if you’re responsible for keeping your payroll and HR processes accurate and up to date.
And if you’d like to see how Cintra manages mileage tracking, rate changes, and payroll compliance in practice, book a demo with one of the team.
Payroll Legislation Guide
The facts, figures, thresholds and allowances for 2026/27 spanning tax, National Insurance, pensions, statutory payments and more.
The Approved Mileage Allowance Payment (AMAP) rate for cars and vans increased to 55p per mile for the first 10,000 business miles in a tax year, effective 6 April 2026. This is an increase from the previous 45p rate, which had been in place since 2011.
The rate changed with effect from 6 April 2026, the start of the 2026/27 tax year. Any mileage claims dated on or after that date should be reimbursed at the new 55p rate.
The AMAP rates apply to employees using their own private vehicles for business travel and cover cars and vans regardless of fuel type, including electric and hybrid vehicles. HMRC's separate Advisory Electricity Rate (AER) applies when employers reimburse employees driving company-owned electric vehicles.
If you pay above 55p per mile (for the first 10,000 miles), the excess must be reported and processed through payroll as a taxable benefit subject to Income Tax and National Insurance. If you pay below it, employees may be entitled to claim Mileage Allowance Relief (MAR) via Self Assessment for the shortfall.
Yes. If your policy names a specific rate of 45p, it is now out of date and must be updated to 55p. If it defers to "the HMRC-approved rate", verify that anyone processing claims is aware the rate has changed, and communicate the update to employees.
The rate above the 10,000-mile threshold remains unchanged at 25p per mile for cars and vans. Employers must track cumulative annual mileage per employee to apply the correct rate once the threshold is crossed.
