Business Mileage Reimbursement: A UK Guide

When employees drive for work in their own car, someone has to account for the miles and the money. In the UK, business mileage reimbursement is governed by HMRC's Approved Mileage Allowance Payment (AMAP) rates. Here is how it works and how to manage it.

What Is Business Mileage Reimbursement?

Business mileage reimbursement is paying employees for the business miles they drive in their own vehicle. HMRC sets approved rates you can pay tax-free. Pay at or below the approved rate and there is nothing to report or tax; pay above it and the excess is taxable.

Current HMRC AMAP Rates

For the 2026/27 tax year, the approved rate for cars and vans is 55p per mile for the first 10,000 business miles and 25p per mile after that. The first-10,000 rate rose from 45p in April 2026, its first change since 2011. Motorcycles and bicycles have their own rates, and you can pay an extra 5p per mile per passenger for work carpooling. Always confirm the current figure on GOV.UK before setting your policy.

Why Accurate Mileage Matters

• Tax compliance. Paying above the approved rate creates a taxable benefit to report.
• Cost control. Inflated or estimated mileage claims quietly add up.
• Duty of care. Business mileage in personal cars is grey fleet, with its own obligations. See our grey fleet guide.
• Fairness. Accurate records mean employees are paid correctly, no more and no less.

How to Manage Mileage Claims

1. Set a clear policy. Define approved rates, what counts as business mileage, and how to claim.
2. Capture accurate miles. Use logged or telematics-based mileage rather than estimates.
3. Separate commuting. Ordinary commuting is not usually claimable.
4. Keep records. Retain claims and mileage evidence for HMRC.
5. Reconcile against cost. Track reimbursed mileage alongside the rest of fleet spend.

How Fleevo Helps With Mileage and Grey Fleet

Fleevo brings mileage, cost, and compliance into one view, so business mileage and grey fleet spend are tracked and auditable alongside your owned and leased vehicles, rather than scattered across claim forms and spreadsheets. That keeps reimbursement accurate and your records ready for HMRC. Explore Compliance and Audit Readiness, or read the grey fleet management guide.

Business Mileage FAQs

What is the HMRC mileage rate for 2026/27?

For cars and vans, 55p per mile for the first 10,000 business miles and 25p thereafter, following an increase from 45p in April 2026. Check GOV.UK for the definitive current rate.

Is business mileage reimbursement taxable?

Not if you pay at or below HMRC's approved rate. Paying above it makes the excess a taxable benefit that must be reported.

Does ordinary commuting count as business mileage?

No. Travel between home and a permanent workplace is ordinary commuting and is not normally reimbursable as business mileage.

Sources

• GOV.UK, Travel, mileage and fuel rates and allowances
• Capture Expense, HMRC Mileage Rates 2026/27