Legislation
Mileage allowance payments 2026-2027
Date
Effective April 6 2026
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:
| Vehicle | First 10,000 miles | Over 10,000 miles |
|---|---|---|
| Privately Owned Cars and Vans | 45p | 25p |
| Bicycle Rate | 20p | 20p |
| Motorcycle Rate | 24p | 24p |
| Passenger Rate (each) | 5p | 5p |
Tax fact card 2026 – 2027
Download your FREE tax fact card to find out the latest changes to payroll tax & legislation from April 2026. This PDF card includes all the key payroll rates and dates that…