HMRC has updated approved mileage and travel allowances for the 2026/27 tax year, including the first increase to car and van mileage rates since 2011.
New approved mileage rates:
• Cars and vans
55p per mile for the first 10,000 business miles
25p per mile over 10,000 business miles
(Previously 45p then 25p)
• Motorcycles
24p per mile
• Bicycles
20p per mile
Other key changes for 2026/27:
• Passenger payments remain at 5p per passenger, per business mile for carrying employees on work journeys
• Company van benefit charge increases to £4,170
(2025/26: £4,020)
• Company car fuel benefit multiplier increases to £29,200
(2025/26: £28,200)
• Van fuel benefit charge increases to £798
(2025/26: £769)
Mileage within HMRC approved rates is generally tax and National Insurance free. Amounts paid above these limits may create additional reporting or tax implications.
Businesses may wish to review mileage reimbursement policies, payroll settings and expense processes following the update.