Are mileage expenses taxable?

HMRC mileage claim rules: are mileage expenses taxable?

The short answer to this question is that mileage expenses are not taxable provided you stay within the rules set out by His Majesty's Revenue & Customs (HMRC).

In the United Kingdom, employees who use their own vehicles for business purposes may be eligible to receive a Mileage Allowance Payment, which is a refund for the money spent on fuel and wear and tear on their vehicles.

The amount of this payment is calculated based on the number of miles driven and the approved mileage rates set by the HMRC. These rates vary depending on the type of vehicle and the number of miles driven.

What are the approved mileage rates per business mile?

Updated in 2026, HMRC mileage rates for cars and vans are 55p per mile for the first 10,000 miles in a tax year and 25p per mile after that. These mileage allowance payments apply to business miles such as trips to visit customers. Until recently, the rates were 45p per mile rate.

Motorcycles and bicycles have different rates: for motorcycles, the rate is 24p per mile, and bicycles is 20p per mile. If you carry fellow employees in your car or van on work journeys, you can claim an additional 5p per passenger, per mile, tax-free.

In general, mileage expenses are not taxable as long as they are within the HMRC approved rates. Ordinary commuting between home and a regular workplace does not apply as allowable business mileage. For example, if an employee claims 55p per mile for a car or van, they will not have to pay tax on this amount. However, if an employer reimburses the employee for mileage expenses at a rate that is higher than the HMRC-approved rate, the excess amount may be considered taxable income.

Employees should keep records that include dates, destinations, and the purposes of trips.

What if an employer pays more than the mileage allowance payments approved rate?

So, for example, if an employer pays the HMRC-approved rates as a maximum, then no tax is due.

However, if the employer decides to pay a higher rate, say 60p per mile for a car or van, rather than 55p, then tax would be payable by the employee on the additional total miles claimed, multiplied by the extra 5p per mile; if they pay less than the approved amount, the employee may be able to claim tax relief on the difference.

The approved amount is the HMRC benchmark, sometimes referred to as an advisory rate for mileage allowance payments (MAPs).

Employees can claim tax relief for business trips in their own vehicle and for unreimbursed business miles, but not for ordinary commuting, so it helps to make sure journeys are logged correctly.

Additionally, if an employer provides a company car to an employee and that employee uses the car for personal reasons, the employee may be required to pay tax on the value of the personal use of the car. This value is calculated based on the car's list price and CO2 emissions.

Self-employed individuals who use their own vehicles for business purposes may also be eligible to claim mileage expenses as a deductible expense. However, they will need to keep detailed records of their mileage and the costs covered by the mileage rates, and the same rules can apply whether the vehicle is petrol, diesel, or electric, in order to support their claim.

MAR claims can be made on a tax return through Self Assessment or with form P87, and you can usually claim tax relief for the current tax year and the previous four, whether for one job or more.

In summary, mileage expenses are generally not taxable in the UK for employees who use their own vehicle for business purposes, as long as they are within the HMRC-approved rates, and employers can reimburse tax-free up to that level, while any excess is taxable and any shortfall may allow relief on the difference or some tax back.

However, there are exceptions to this rule, such as when an employer reimburses an employee at a rate higher than the approved mileage rate or when a company car is used for personal reasons. Self-employed individuals may also be able to claim mileage expenses as a deductible expense, but they must keep detailed records to support their claim.

Disclaimer: This is not legal, accounting, or tax advice – it's simply a guide. If you need help, check with your accountant or contact HMRC directly.