Business Mileage: A Guide to Claiming Tax Relief When Using Your Own Vehicle for Work

If you use your own car, van, motorcycle or bicycle for work, you may be entitled to claim tax relief on qualifying business mileage. This forms part of the wider category of tax relief for job expenses, which also covers equipment, professional fees and working from home. For the 2026/27 tax year, HMRC allows employees to receive tax-free mileage payments up to its approved rates or, where their employer pays less, to claim tax relief on the difference through Mileage Allowance Relief (MAR). Understanding the rules can help you receive the correct reimbursement while avoiding common mistakes that may result in HMRC rejecting your claim. Mileage relief is calculated against your marginal Income Tax rate, which is explained more fully in our ultimate guide to personal tax in the UK. One of the most important distinctions is between qualifying business journeys and ordinary commuting, as only genuine business travel is eligible for relief. This guide explains how HMRC mileage rates work, when you can claim tax relief, the records you should keep and the common errors to avoid when using your own vehicle for work.

What Counts as Business Mileage?

Business mileage is a specific example of what is an allowable expense for employees. Journeys you make as part of your employment using your own vehicle, undertaken wholly and exclusively for business purposes rather than ordinary commuting. Examples of qualifying business journeys include:

• Travelling from your office to visit clients or customers.
• Driving to temporary workplaces.
• Attending meetings at different business locations.
• Travelling between multiple workplaces during the working day.

By contrast, travel between your home and your permanent workplace is treated as ordinary commuting and does not qualify for tax relief, even if you regularly work from different locations.

Using Your Own Vehicle for Work

If you are using your own vehicle for work, your employer can reimburse qualifying business journeys using HMRC’s Approved Mileage Allowance Payments (AMAPs). These payments compensate employees for fuel, servicing, repairs, insurance, depreciation and other running costs associated with business travel. Where your employer reimburses mileage at or below HMRC’s approved rates, the payments are generally free from Income Tax and National Insurance Contributions. If your employer chooses not to reimburse you or pays less than the approved amount, you may be able to claim tax relief on the difference from HMRC. Self-employed individuals follow a different process entirely, since vehicle costs are deducted directly against business profits as part of the wider costs you can claim back when self-employed.

HMRC Mileage Rates for 2026/27

For the 2026/27 tax year, the approved HMRC mileage rates remain:

Vehicle	Approved Rate
Cars and vans	45p per mile for the first 10,000 business miles, then 25p per mile thereafter
Motorcycles	24p per mile
Bicycles	20p per mile

These rates are intended to cover the overall cost of operating your own vehicle while undertaking qualifying business travel.

What Is Business Mileage Allowance?

The business mileage allowance is the amount your employer pays towards the cost of business travel undertaken in your own vehicle. Employers can choose how much they reimburse, but the tax treatment depends on whether the payment matches HMRC’s approved mileage rates. Employees required to work from home for part of the week may also be able to claim work-from-home tax relief alongside any mileage relief for the days they do travel. If your employer pays the full approved rate, there is normally nothing further to claim. However, if the reimbursement is lower than HMRC’s approved amount, you may qualify for Mileage Allowance Relief.

How to Claim Business Mileage Relief

If your employer reimburses mileage below HMRC’s approved rates, you can claim business mileage relief on the shortfall. Rather than receiving the full unpaid amount, you receive tax relief based on your marginal Income Tax rate. For example, if HMRC allows 45p per mile but your employer pays only 30p per mile, you may claim tax relief on the remaining 15p per mile. If you complete a Self Assessment tax return, the claim should normally be included within your employment expenses. This is the same section where you would also include other unreimbursed costs, such as claiming professional fees and subscriptions required for your role. Employees who do not submit a Self Assessment return can usually claim directly through HMRC using the appropriate online service or by contacting HMRC.

Passenger Payments

If you carry colleagues in your own vehicle on qualifying business journeys, your employer may also pay an additional 5p per passenger per business mile. When paid in accordance with HMRC’s rules, these passenger payments are generally exempt from Income Tax and National Insurance. Where a business journey also involves hosting a client, though, any related hospitality costs fall under the separate and much stricter taxation of entertainment expenses.

Keeping Accurate Mileage Records

Good record keeping is essential when claiming mileage relief. HMRC may request evidence to support your claim, particularly where mileage forms part of a larger employment expenses claim. Your mileage log should include:

• The date of each journey.
• The start and destination locations.
• The purpose of the business trip.
• The number of business miles travelled.
• The amount reimbursed by your employer, if any.

Journeys to attend a training course can also count as qualifying business mileage, provided the course itself meets the separate conditions for training tax relief. Maintaining accurate records throughout the year makes it easier to prepare your claim and demonstrate compliance if HMRC asks for supporting information.

Common Mistakes to Avoid

Many incorrect mileage claims arise because employees misunderstand HMRC’s rules. Common mistakes include:

• Claiming ordinary commuting between home and a permanent workplace.
• Including private journeys within business mileage records.
• Failing to keep accurate mileage logs.
• Claiming the full mileage amount instead of only the unreimbursed difference.
• Using outdated mileage rates rather than the current HMRC-approved rates.

Making a Successful Business Mileage Claim

Understanding the rules for business mileage can help ensure you receive the tax relief you are entitled to while remaining compliant with HMRC requirements. Before making a claim, confirm that your journeys qualify as business travel, compare your employer’s reimbursement with the current HMRC mileage rates and keep detailed mileage records to support your claim. Following these steps will reduce the risk of HMRC rejecting your claim and ensure you receive any available business mileage allowance or Mileage Allowance Relief. If your role also requires specific tools or protective clothing, it’s worth checking whether you can claim flat-rate expenses for work clothing and tools alongside your mileage claim.

Business Mileage Case Study

James, a regional sales manager, visited our Farringdon office after discovering that his employer reimbursed business travel at a rate lower than HMRC’s approved mileage allowance. Because he regularly drove his own car to visit clients and temporary workplaces, he wanted to know whether he could claim business mileage tax relief for the difference and what records HMRC would expect him to keep.

After reviewing his mileage logs and employer reimbursement records, we confirmed that many of his journeys qualified as business mileage because they involved travelling to client meetings and temporary work locations rather than commuting to his permanent workplace. We explained how HMRC mileage rates apply, how Mileage Allowance Relief works when an employer pays less than the approved rate, and why tax relief is calculated on the unreimbursed amount rather than the full mileage payment.

During the consultation, we also highlighted the importance of maintaining accurate mileage records, including journey dates, destinations, business purposes and miles travelled, to support any future HMRC enquiry. By separating qualifying business journeys from ordinary commuting, James gained confidence that his claim would meet HMRC’s requirements.

By the end of the meeting, James understood how to calculate his entitlement correctly, maintain compliant mileage records and maximise the tax relief available for using his own vehicle for work.