Mileage Allowance Calculator UK 2025/26 — HMRC Approved Rates & Tax Relief
If you use your own car for work, your employer can pay up to 45p per mile (first 10,000 miles) tax-free. If they pay less — or nothing — you can claim Mileage Allowance Relief (MAR) from HMRC and get tax back. This calculator works out exactly what you should receive and how much tax relief you can claim.
HMRC AMAP rates 2025/26: cars/vans 45p (first 10,000 miles) then 25p; motorcycles 24p; bicycles 20p. Passenger supplement: 5p/mile per passenger. Claim MAR via self-assessment or Form P87. Can backdate 4 years. Employer overpayments above approved rates are taxable.
HMRC Approved Mileage Rates 2025/26
| Vehicle | First 10,000 miles | Over 10,000 miles |
|---|---|---|
| Car or van | 45p per mile | 25p per mile |
| Motorcycle | 24p per mile | 24p per mile |
| Bicycle | 20p per mile | 20p per mile |
In addition, if you carry fellow employees in your own car on business journeys, you can claim an additional 5p per mile per passenger. Your passengers can also claim their share of the journey if their employer does not reimburse them.
Why the Approved Rates Feel Low
The HMRC approved rates have been unchanged since April 2011. Since then, fuel prices, insurance, servicing, and the overall cost of running a car have all risen substantially. Many motoring organisations estimate the true cost per mile of running an average car is now 60–80p or more. The mismatch means that employees using their own cars for work are often subsidising their employers’ business costs — which is why claiming every penny of Mileage Allowance Relief available is important.
Claiming Mileage Allowance Relief (MAR)
If your employer pays less than the approved rate (or nothing), you can claim MAR. There are two routes:
- Self-assessment tax return — if you already complete a return, claim MAR in the employment pages. The relief reduces your taxable pay for the year.
- Form P87 — if you do not complete a self-assessment return, use HMRC’s P87 form (available at gov.uk) to claim relief for up to 4 previous tax years. Submit online or by post. HMRC normally processes within 8–12 weeks and pays a refund or adjusts your tax code.
Keep a mileage log. HMRC can ask for evidence of your business miles — your log should record the date, destination, reason for the journey, and miles travelled. A simple spreadsheet or app will do.
Frequently Asked Questions
Yes — a flat car allowance is different from a mileage allowance. If you receive a flat monthly car allowance (e.g. £300/month) and also drive business miles in your own car, you can still claim MAR on the business miles driven. The car allowance itself is taxable as salary; the mileage relief is separate. Many employees with car allowances miss this claim entirely.
HMRC requires you to keep a mileage log showing for each journey: the date; start and end location; purpose of the trip; and number of miles. You do not need fuel receipts for the approved rate claim (you are not claiming actual fuel costs). Various apps automatically log journeys using GPS — these are acceptable records. Keep records for at least 6 years after the tax year in question.