HMRC has announced updated mileage allowance rates for the 2026/27 tax year, with changes applying from 6 April 2026.

Please note: These changes are backdated to 6 April 2026.

The Approved Mileage Allowance Payment (AMAP) rate for cars and vans has increased from 45p to 55p per mile for the first 10,000 business miles travelled each tax year. The rate for mileage over 10,000 miles remains unchanged at 25p per mile.

The current approved rates are now:

• Cars and vans – 55p per mile for the first 10,000 business miles, then 25p thereafter
• Motorcycles – 24p per mile
• Bicycles – 20p per mile
• Passenger payments – 5p per passenger per business mile

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These rates can be used by employers to reimburse employees for qualifying business travel without creating a tax liability, provided payments remain within HMRC’s approved limits.

If your business reimburses mileage expenses, now is a good time to review your payroll and expense processes to ensure they reflect the updated guidance. This may also be relevant for businesses reviewing travel policies or budgeting for employee travel costs in the year ahead.

Get in touch

At Jerroms, we work closely with individuals and businesses to ensure payroll, tax and compliance processes remain accurate, efficient and up to date.

If you would like support reviewing your current arrangements or understanding how these changes may affect your business, please get in touch with your usual Jerroms contact.

Further information can be found on the official HMRC guidance here:
HMRC Travel Mileage and Fuel Rates Guidance