Mileage Allowance Relief: Claiming Tax Back on Work Travel (2026-27)

If you drive your own car for work journeys—visiting clients, travelling to temporary sites, or attending meetings away from your normal workplace—you may be able to claim tax relief on those miles, even if your employer doesn't reimburse you. This guide explains how Mileage Allowance Relief (MAR) works, what you can claim, how to calculate it, and how to submit your claim to HMRC for the 2026-27 tax year.

What is Mileage Allowance Relief?

Mileage Allowance Relief is a tax relief that lets you claim back tax on business mileage when you use your own vehicle for work. HMRC sets standard "Approved Mileage Allowance Payment" (AMAP) rates that cover fuel, insurance, servicing, and wear-and-tear. If your employer pays you less than these rates—or nothing at all—you can claim tax relief on the difference.

The relief works by reducing your taxable income. You don't get a cash refund of the full mileage amount; instead, you get back the tax you would have paid on that amount. So if you're a basic-rate (20%) taxpayer and claim £1,000 in mileage relief, you'll receive £200 back (20% of £1,000). Higher-rate (40%) taxpayers get 40% back, and so on.

The Approved Mileage Rates for 2026-27

HMRC's AMAP rates for the 2026-27 tax year are:

• Cars and vans: 45p per mile for the first 10,000 business miles in the tax year, then 25p per mile for every mile over 10,000
• Motorcycles: 24p per mile (flat rate, no threshold)
• Bicycles: 20p per mile (flat rate)
• Passenger payments: An additional 5p per mile for each passenger you carry who is also travelling on business

These rates are set to cover all the running costs of your vehicle—fuel, insurance, road tax, servicing, MOT, depreciation, and repairs. You cannot claim separately for fuel or other costs if you're using the AMAP rates; it's an all-in figure.

Example: Priya drives 12,000 business miles in her car during 2026-27. Her employer pays her nothing. The AMAP calculation is:

• First 10,000 miles: 10,000 × 45p = £4,500
• Remaining 2,000 miles: 2,000 × 25p = £500
• Total AMAP allowance: £5,000

Priya is a basic-rate taxpayer (20%). She can claim tax relief on the full £5,000, so her refund will be £5,000 × 20% = £1,000.

What Counts as Business Mileage?

Not every journey you make for work qualifies. HMRC distinguishes between business travel (claimable) and ordinary commuting (not claimable).

Claimable journeys

• Travel from your home or normal workplace to a temporary workplace (see below)
• Travel between different work sites (e.g., visiting multiple clients in one day)
• Travel to attend meetings, training, or conferences away from your usual place of work
• Journeys to pick up supplies or equipment for work
• Carrying a work colleague as a passenger on a business journey (you can claim the 5p passenger rate for them)

Not claimable

• Ordinary commuting: Your regular journey from home to your permanent workplace and back. This is private travel, even though it's necessary for work.
• Travel that is substantially ordinary commuting (e.g., a small detour on your normal route doesn't make the whole journey claimable)
• Private journeys, even if you happen to think about work during them

The Temporary Workplace Rule

A temporary workplace is somewhere you go to work for a limited period, or for a temporary purpose. HMRC's 24-month rule is key here: if you attend a workplace for a continuous period expected to last (or actually lasting) more than 24 months, it becomes a permanent workplace, and travel there becomes ordinary commuting [ITEPA 2003 s. 339].

Example: James is a software consultant. His normal office is in Manchester, but he's assigned to a client site in Leeds for an 18-month project. Travel from home to the Leeds site is claimable business mileage because it's a temporary workplace (under 24 months). If the project is extended and he ends up working there for 25 months, the travel stops being claimable from the point it became clear the assignment would exceed 24 months.

If you have no permanent workplace (e.g., you're a mobile worker or home-based), then travel to various client sites is generally claimable, but you need to be careful: if you work at one site regularly and it becomes your base, it may be treated as permanent.

What If Your Employer Already Pays Mileage?

If your employer reimburses you for business mileage, compare what they pay against the AMAP rates. You can only claim Mileage Allowance Relief on the shortfall.

Example: Liam drives 8,000 business miles. The AMAP rate gives him 8,000 × 45p = £3,600. His employer pays 25p per mile, so he receives 8,000 × 25p = £2,000. The shortfall is £3,600 − £2,000 = £1,600. Liam can claim tax relief on £1,600. As a basic-rate taxpayer, he'll get back £1,600 × 20% = £320.

If your employer pays more than the AMAP rates, the excess is treated as taxable income (a "benefit"), and you may have to pay tax on it. However, most employers stick to AMAP or below to avoid this.

Keeping Records: Your Mileage Log

HMRC expects you to keep a mileage log showing:

• Date of each journey
• Start and end locations (or a description: "Home to client site in Bristol")
• Purpose of the journey (e.g., "Client meeting," "Site visit," "Training course")
• Miles travelled
• Passenger details if claiming the 5p rate

You don't have to submit this log with your claim, but HMRC can ask for it if they check your return. A simple spreadsheet, a notebook, or a mileage-tracking app all work. The key is contemporaneous records—filling in your log at the time, not reconstructing it months later.

Top tip: Note your car's odometer reading at the start and end of the tax year (6 April). This helps verify your total mileage and shows HMRC you're keeping proper records.

How to Claim Mileage Allowance Relief

There are two main routes, depending on your circumstances:

1. P87 form (for employees, claims under £2,500)

If you're an employee (PAYE) and your total claim for work expenses—including mileage—is less than £2,500 for the year, use HMRC's online P87 form. You can find it by logging into your Personal Tax Account at gov.uk, or search "P87 claim tax relief" on the HMRC website.

The P87 covers the current and previous four tax years, so if you've never claimed before, you can backdate. For 2026-27, you can claim back to 2022-23 (claims must be made within four years of the end of the relevant tax year).

You'll need:

• Your employer's PAYE reference (on your payslip)
• Total business miles for the year
• The rate your employer paid (if any)

HMRC will adjust your tax code for future years to give you the relief, or send a refund if you've overpaid. Processing typically takes a few weeks.

2. Self Assessment tax return

If you complete a Self Assessment return (because you're self-employed, a company director, or have other untaxed income), claim your mileage relief on the "Employment" pages (if you're an employee claiming MAR) or in your business expenses (if self-employed).

For employees: use the "Employment expenses" section and enter your mileage claim under "Business travel and subsistence." You'll calculate the AMAP amount minus any employer reimbursement.

For the self-employed: you can claim business mileage as an allowable expense using the same AMAP rates, or you can use actual costs (but not both). Most sole traders find AMAP simpler.

3. Paper form P87

If you prefer not to claim online, you can request a paper P87 from HMRC, fill it in, and post it. This is slower but works if you're not comfortable with online systems.

Worked Example: Full Calculation

Scenario: Emma is a sales manager. She drives her own car for work. In 2026-27:

• Total business miles: 14,000
• Employer reimbursement: 30p per mile
• Emma is a higher-rate (40%) taxpayer

Step 1: Calculate the AMAP allowance:

• First 10,000 miles: 10,000 × 45p = £4,500
• Next 4,000 miles: 4,000 × 25p = £1,000
• Total AMAP: £5,500

Step 2: Calculate employer reimbursement:

• 14,000 × 30p = £4,200

Step 3: Calculate the shortfall:

• £5,500 − £4,200 = £1,300

Step 4: Calculate tax relief:

• £1,300 × 40% = £520

Emma can claim £520 back from HMRC via her P87 or Self Assessment return.

Motorcycles and Bicycles

If you use a motorcycle or bicycle for business travel, the same principles apply, but the rates are different:

• Motorcycles: 24p per mile (flat rate, no 10,000-mile threshold)
• Bicycles: 20p per mile (flat rate)

Example: Tom cycles 3,000 business miles in 2026-27. His employer pays nothing. AMAP allowance: 3,000 × 20p = £600. As a basic-rate taxpayer, Tom claims £600 × 20% = £120 tax relief.

Bicycle mileage is a great green option and HMRC actively encourages it by allowing the 20p rate.

Passenger Payments

If you carry work colleagues in your car on business journeys, you can claim an extra 5p per mile per passenger. This is on top of your own mileage claim.

Example: Sarah drives 2,000 business miles, carrying two colleagues on 500 of those miles. Her claim:

• Own mileage: 2,000 × 45p = £900
• Passenger 1: 500 × 5p = £25
• Passenger 2: 500 × 5p = £25
• Total AMAP: £950

If her employer pays nothing, and she's a basic-rate taxpayer, she gets £950 × 20% = £190 back.

Common Mistakes

1. Claiming for ordinary commuting
Your daily drive to your regular office is not claimable, even if it's a long journey or you sometimes work from home. Only travel to temporary workplaces or between work sites counts.

2. Not keeping a mileage log
"I definitely drove about 10,000 miles" won't satisfy HMRC if they check. Keep a proper log with dates, destinations, and purposes.

3. Mixing up total mileage and business mileage
If your car does 15,000 miles in a year but only 8,000 are for business, you claim on the 8,000, not the 15,000. HMRC may compare your claim to your MOT or service records.

4. Claiming after the deadline
You have four years from the end of the tax year to claim. For 2026-27 (ending 5 April 2027), the deadline is 5 April 2031. Don't leave money on the table.

5. Claiming fuel costs separately
The AMAP rates already include fuel. You can't claim 45p per mile and your petrol receipts—it's double-counting.

6. Forgetting to update your claim if circumstances change
If you change jobs mid-year, or your employer starts paying mileage, adjust your claim accordingly. Each job and each rate needs separate calculation.

What About Company Cars?

If you drive a company car (provided by your employer), you cannot use the AMAP rates or claim Mileage Allowance Relief. Company car drivers pay tax on the car as a benefit-in-kind, and the tax system assumes the employer covers running costs.

However, if you pay for fuel for business journeys in a company car out of your own pocket, and your employer doesn't reimburse you, you can claim a deduction for the actual fuel cost (you'll need receipts and a mileage log to calculate the business proportion). This is more complex and less generous than AMAP, so most company car drivers ensure their employer covers business fuel.

Self-Employed and Mileage

If you're self-employed (a sole trader or partner), you can claim business mileage as an allowable business expense using the same AMAP rates. You include this in your Self Assessment return under business expenses.

Alternatively, you can claim the actual costs of running your vehicle (fuel, insurance, repairs, depreciation, etc.) and apportion them between business and private use. Most self-employed people find AMAP simpler and often more generous, especially for higher mileage.

You cannot use both methods in the same year—pick one and stick with it. If you choose actual costs, keep all receipts and a detailed mileage log showing business vs. private split.

Electric and Hybrid Vehicles

The AMAP rates for cars (45p/25p) apply equally to petrol, diesel, electric, and hybrid vehicles. HMRC hasn't set a separate rate for electric cars, even though their running costs differ. The 45p rate is considered sufficient to cover electricity costs as well as depreciation on a typically more expensive vehicle.

How Long Does a Claim Take?

P87 claims usually process within 6–8 weeks, though it can be quicker. HMRC will either adjust your tax code to give you the relief over the rest of the tax year, or issue a refund cheque or bank transfer if you've already overpaid.

Self Assessment claims are settled when your tax return is processed, typically a few weeks after you file (assuming you file online and there are no queries).

What to Do Next

If you have specific questions about your own mileage situation—whether a particular journey counts, how to handle a complex employer reimbursement arrangement, or how to calculate relief across multiple jobs—use the AI Tax chat at myaitax.info. You'll get instant, tailored answers based on your circumstances.

If you want someone to handle the whole claim for you—calculating your mileage, filling in the forms, dealing with HMRC, and maximising your refund—book a session with AI Accountant (also at myaitax.info). They'll take care of everything and make sure you claim every penny you're entitled to, including backdated years if you've missed out before.

Don't leave money on the table. If you've driven business miles in your own car and not claimed, you could be owed hundreds or even thousands of pounds. Check your records, add up your miles, and get your claim in before the four-year deadline.