Mileage allowance payments 2024-25 | Moorepay

Payroll & HR Rates

Mileage allowance payments 2025-2026

Legislation

Mileage allowance payments 2025-2026

Date

Effective April 6 2025

Summary

Mileage allowance payments are tax-free reimbursements for employees using their own vehicles for business travel. These payments cover costs like fuel, wear and tear, and insurance.

 

HMRC sets approved rates (e.g. 45p per mile for cars up to 10,000 miles), and payments within these limits are tax-free.

You can also pay an extra 5p per mile for each passenger, as long as they’re also an employee travelling for work. Anything above the approved rates must be reported and may be taxable.

Here are the current mileage allowance payments:

VehicleFirst 10,000
miles
Over 10,000
miles
Privately Owned Cars and Vans45p25p
Bicycle Rate20p20p
Motorcycle Rate24p24p
Passenger Rate (each)5p5p
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Tax fact card 2025 – 2026

Download your FREE tax fact card to find out the latest changes to payroll tax & legislation from April 2025. This PDF card includes all the key payroll rates and dates that…