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Increase in Mileage Allowance

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Newsletter issue – July 2026

The Approved Mileage Allowance Payment (AMAP) for employees using their own car for work (not commuting) has risen from 45p to 55p per mile for the first 10,000 miles per tax year. After 10,000 miles, the rate remains 25p per mile.

The Chancellor made this announcement recently and the change has been backdated to 6 April 2026.This is the first increase since 2011 and applies to employees and self-employed workers using their own car or van for work. You cannot claim separately for fuel, tax, MOT, repairs, etc. - the mileage rate is meant to cover all running costs.

If your employer pays less than 55p, you can claim tax relief on the difference (for example, employer only pays 30p, so you claim tax relief on 25p). If your employer pays nothing, you can claim tax relief on the full 55p. Claims are made via HMRC or a self-assessment tax return.

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