Claiming Tax Relief on Work Mileage in 2026

Claiming the Correct Tax Relief for Work Mileage

If you use your own vehicle for business journeys, it's worth checking whether you're receiving the full tax relief you're entitled to.

Many employees receive Mileage Allowance Payments (MAPs) from their employer to cover the cost of business travel. These payments can be made tax-free up to HMRC's approved mileage rates. However, where an employer pays less than the approved amount, employees may be able to claim Mileage Allowance Relief on the difference.

What Are the Approved HMRC Mileage Rates?

From 6 April 2026, HMRC's approved rates for business travel are:

• Cars and vans: 55p per mile for the first 10,000 business miles in the tax year
• Cars and vans: 25p per mile for any business mileage above 10,000 miles
• Motorcycles: 24p per mile
• Bicycles: 20p per mile

These rates determine the maximum amount that can be paid tax-free by an employer for qualifying business journeys.

Can You Claim Additional Tax Relief?

If your employer pays less than HMRC's approved rate, you may be able to claim tax relief on the shortfall.

For example, if you drive 5,000 business miles and receive 40p per mile from your employer, HMRC allows you to claim tax relief on the difference between the amount received and the approved rate.

While the relief won't reimburse the full shortfall, it can still reduce your tax bill and is often overlooked by employees.

What Happens If Your Employer Pays More?

Where mileage payments exceed HMRC's approved rates, the excess amount will generally be taxable and must be reported through payroll. Employers should also be aware that National Insurance contributions may apply to any excess payments.

Don't Forget Passenger Payments

Employees who carry colleagues on qualifying business journeys can receive an additional 5p per passenger per business mile tax-free.

It's important to note that this only applies where a specific passenger payment is made. If no payment is received, or less than 5p is paid, no additional tax relief can be claimed on the difference.

Keep Accurate Mileage Records

To support any claim for Mileage Allowance Relief, you should retain clear records of:

• Dates of business journeys
• Start and destination locations
• Purpose of the trip
• Business miles travelled
• Mileage payments received

Good record-keeping will help ensure any claim is accurate and can be supported if requested by HMRC.

How Charlton Baker Can Help

Many employees, directors and business owners miss out on valuable tax relief simply because they are unaware of the rules or don't keep the right records.

Our Personal Tax team can help you understand what reliefs are available, ensure claims are made correctly, and review your wider tax position to identify other potential savings. Give them a call on 01380 723692 or email them here.