Updated November 2026
Mileage tax relief (mileage allowance relief)
Plenty of employers still reimburse business mileage at 45p, at 25p, or not at all. If you are paid less than HMRC's approved rate of 55p a mile, the shortfall is not lost: you can claim tax relief on it.
How tax relief on mileage works
HMRC's approved rate for 2026/27 is 55p per mile for your first 10,000 business miles and 25p after that. Add up the approved amount for the year, take away whatever your employer paid you for those miles, and the gap is what you claim relief on.
| Your employer pays | Shortfall per mile | On 5,000 miles |
|---|---|---|
| Nothing | 55p | £2,750.00 |
| 25p | 30p | £1,500.00 |
| 45p (the old approved rate) | 10p | £500.00 |
Paid a higher rate that drops off early? NHS mileage rates fall to 36p after 4,500 miles, so higher-mileage NHS staff often end the year below the approved amount.
Note the last row: because the approved rate rose on 6 April 2026 and many mileage policies have not been updated, employees who were fully reimbursed last year now have a shortfall they can claim on.
What mileage tax relief is actually worth
Relief is not a refund of the whole shortfall. It reduces your taxable income by that amount, so you get back your tax rate on it. Some worked examples for 2026/27:
| Business miles | Employer pays | Approved amount | Shortfall | Relief at 20% | Relief at 40% |
|---|---|---|---|---|---|
| 3,000 | Nothing | £1,650.00 | £1,650.00 | £330.00 | £660.00 |
| 5,000 | 25p | £2,750.00 | £1,500.00 | £300.00 | £600.00 |
| 8,000 | 45p | £4,400.00 | £800.00 | £160.00 | £320.00 |
| 12,000 | 25p | £6,000.00 | £3,000.00 | £600.00 | £1,200.00 |
The 10,000-mile threshold counts across the whole tax year. In the 12,000-mile row the approved amount is 55p on 10,000 miles plus 25p on 2,000. Relief also can't be more than the tax you paid that year.
Who can claim, and who can't
| Your situation | What you can claim |
|---|---|
| Employee using a car, van, motorbike or bicycle you bought or leased with your own money | Mileage allowance relief at the approved rate, minus what your employer paid |
| Employee with a company car | No approved-rate relief. Relief on the actual fuel or electricity you paid for business trips, minus any reimbursement (see advisory fuel rates) |
| Self-employed | Not MAR: you use simplified expenses or actual costs in your accounts |
| Commuting to your permanent workplace | Nothing. Only business journeys count — see which travel HMRC gives relief on |
For your own vehicle the approved rate is meant to cover the whole cost of owning and running it. GOV.UK is explicit that you cannot claim separately for fuel, electricity, vehicle tax, MOTs or repairs.
How to claim it
If you do not file a Self Assessment return, use HMRC's online claim or the P87 form. If you do file Self Assessment, you must claim through the return instead. Either way HMRC asks for copies of your mileage logs, and they must show the reason for every journey and the postcode of its start and end point. If you have more than one job, send a log for each.
How far back you can go
You can claim for the current tax year and the 4 previous tax years. Miles driven before 6 April 2026 use the old 45p rate. See mileage rates for 2025/26 and earlier for what a back-claim is worth.
This is general information from GOV.UK, not tax advice. If your situation is unusual, check with HMRC or an accountant.
Work out your mileage claim
Every forgotten trip is money left unclaimed. Odo records each drive for you automatically →
Uses the HMRC approved mileage allowance payment (AMAP) rates for 2026/27: 55p per mile for the first 10,000 business miles, then 25p.
Stop reconstructing your mileage from memory
Odo logs your drives automatically in the background, you swipe each one business or personal, and it totals your claim at the 2026/27 rates — with a CSV export of every trip: date, reason, distance and the start and end postcodes HMRC asks for in a PAYE claim.