Mileage Allowance Relief explained
If you use your own car for work and your employer pays you less than HMRC’s approved rate (55p a mile for the first 10,000 business miles from April 2026) you can claim tax relief on the gap. If they pay nothing, you can claim relief on the whole amount.
Updated 14 October 2026
How it works
HMRC sets approved mileage rates for using a private vehicle for business: 55p a mile for the first 10,000 business miles in a tax year and 25p a mile after that, for cars and vans (from 6 April 2026; it was 45p before).
Your employer can pay you up to those rates tax-free. If they pay less, the difference is your Mileage Allowance Relief. You do not get the difference as cash. You get tax relief on it, which means a refund of the tax you paid on that amount.
A worked example
You drive 6,000 business miles in 2026/27 and your employer pays 30p a mile. The approved amount is 6,000 × 55p = £3,300. You were paid 6,000 × 30p = £1,800. The difference is £1,500.
As a basic-rate taxpayer you get 20 per cent of that back: £300. A higher-rate taxpayer gets 40 per cent: £600.
What counts as business mileage
Trips made as part of your job: visiting clients, travelling between sites, going to a temporary workplace. Your ordinary commute to your normal place of work does not count, and neither does a personal detour on a business trip.
How to claim
For claims up to £2,500 a year you can usually claim online or by post. Above that, you need to complete a Self Assessment tax return. You can claim for the current year and the previous four tax years.
HMRC can ask for evidence, so keep a log: date, start and end points, purpose and miles for every business journey. Odomint’s mileage tracker records each drive automatically, lets you tag it business or personal, and works out the claim at the correct rate for each tax year.
Passengers, motorcycles and bicycles
The approved rates are not only for cars. Motorcycles have their own rate of 24p a mile and bicycles 20p a mile, with no 10,000-mile threshold. Employers can also pay up to 5p a mile per passenger for carrying fellow employees on business journeys, tax-free, though you cannot claim Mileage Allowance Relief for passenger payments your employer does not make.
Mileage Allowance Relief is not available for a company car. If your employer provides the car, different rules apply, including advisory fuel rates for reimbursing business fuel. The relief described here is for your own vehicle, used for work.
Common questions
Can I claim mileage if my employer pays nothing?
Yes. If your employer pays no mileage allowance, you can claim tax relief on the full approved amount: 55p a mile for the first 10,000 business miles from April 2026, 25p after.
How far back can I claim Mileage Allowance Relief?
For the current tax year and the previous four tax years.
Is Mileage Allowance Relief paid as cash?
No. It is tax relief, so you get back the tax you paid on the shortfall: 20 per cent of it as a basic-rate taxpayer.
Check any car before you buy it
MOT history, every advisory and the full mileage record are free for any UK registration. An Odomint Check adds outstanding finance, insurance write-offs, stolen markers and salvage history, with a £10,000 data guarantee.