The Approved Mileage Allowance Payment (AMAP) rate has increased for the first time in 15 years. The rate applied to the first 10,000 business miles travelled by employees per year will increase from 45p to 55p and will be backdated to April 2026. The increased rate will also apply to the simplified expenses regime for the self-employed in 2026-27.
On 21 May 2026, the Chancellor announced that from 6 April 2026, the Approved Mileage Allowance Payment (AMAP) rate for employees using their own cars or vans for business travel would increase to 55p per mile, from 45p per mile, for the first 10,000 business miles travelled per year.
- Business mileage after 10,000 miles will remain at 25p per mile (except for National Insurance purposes, which will be at 55p per mile, rather than the previous 45p per mile, regardless of mileage).
- There has been no change to the rates for motorcycles or bicycles. These will remain at 24p and 20p respectively.
- Passenger payments for employees' car sharing will remain at 5p per passenger per business mile.
- The government have stated that they will do a review of all rates, which will be set out at a future Budget.
HMRC have updated their guidance to apply the same increase to the Simplified expenses rules, which allow the self-employed to claim a fixed rate deduction for motoring expenses, per business mile. For the self-employed in 2026-27:
- Cars and goods vehicles attract a rate of 55p (previously 45p) per mile for the first 10,000 miles, and 25p per mile thereafter. This latter rate is unchanged.
- Motorcycles attract a rate of 24p per mile, the same as in 2025-26.
The government states that the increase in the rates has been made "in recognition of the pressures facing drivers as a result of the effects of the Iran war".
- The chair of the Association of Taxation Technicians' Technical Steering Group, Jon Stride, said, "the increase to 55p per mile is welcome and long overdue." He then went on to say, "However, a 10p increase after 15 years still does not fully reflect how much costs have risen since 2011...Had mileage rates increased in line with inflation, they would be 68p today, an increase of 23 pence. It is particularly disappointing that the 25p rate for mileage over 10,000 miles has been left untouched. Those employees who drive the greatest distances for work are often the ones under the greatest financial pressure from rising motoring costs."
- The ATT are calling for the new, higher rate to be kept under regular review.
For those who are self-employed and have an accounting period that does not coincide with the tax year:
- The profits of the accounting period must be calculated in accordance with the mileage rates that apply to that tax year.
- HMRC have included some Worked examples in their guidance.
Useful guides on this topic
Authorised mileage rates (own vehicle)
How much can you claim for the costs of business travel? How much can be reimbursed by an employer towards the costs of qualifying business travel?
Travel (employer's guide)
How do employers apply the tax rules to travel costs? What is available for subsistence costs? What are the rules on home-to-work travel?
Travel (self-employed)
What journeys qualify for tax relief? Where is the base of operations? What is business travel? Can a home be a workplace? What case law is there?
Flat (fixed) rate expenses or actual cost toolkit
What types of expenses can I use fixed-rate expense deductions for? Which is better, fixed-rate deductions or actual cost?
External link
ATT: Workers still losing out after 15 years of frozen mileage rates