HMRC raised the approved mileage rate from 45p to 55p a mile for the first 10,000 business miles in 2026 — the first change since 2011. If you use your own car for business, you can now claim more, and the increase is backdated to 6 April 2026, so it covers the whole tax year.
Here's what changed and what to check.
What the new rate is
The approved mileage rate for cars and vans is now 55p a mile for your first 10,000 business miles in the year. Anything over 10,000 miles stays at 25p a mile.
The change was announced on 21 May 2026 and backdated to 6 April 2026, so the 55p rate applies from the start of the 2026/27 tax year.
What it's worth
At 10,000 business miles, the new rate lets you claim £5,500 tax-free, up from £4,500 at the old 45p rate — about £1,000 more for the year.
If you run your own limited company, this is money the company can reimburse you tax-free for using your personal car, and the reimbursement is a deductible cost for the company.
What to check
A lot of mileage apps and accounting templates still default to the old 45p rate. If yours does, your claims are running low and you're leaving money on the table. It's worth checking what rate your app or spreadsheet is set to before your next claim, and re-running any claims you've already drafted at 45p — the increase is backdated, so earlier journeys in the tax year qualify at 55p too, for the first 10,000 miles.
Frequently asked questions
What is the HMRC mileage rate for 2026/27? 55p a mile for the first 10,000 business miles in your own car, then 25p a mile above 10,000. The 55p rate applies from 6 April 2026.
When did the mileage rate change? It was announced on 21 May 2026 and backdated to 6 April 2026. It's the first change to the approved rate since 2011.
How much can I claim at the new rate? At 10,000 miles, £5,500 tax-free — up from £4,500 at the old 45p rate.
Work with us
If you're not sure you're claiming everything you should be — mileage or otherwise — that's what we sort out for founders. Book a call with Carr Accounting Studio.
Or start with the free FounderTax check — it flags where you might be under-claiming in about two minutes.
General information, not advice. UK figures 2026/27 — they change, and your situation may differ. Written by David Carr, chartered accountant and founder of Carr Accounting Studio.