On the 6th April 2026, HMRC increased the approved mileage rate to 55p per mile for the first 10,000 business miles. It's a helpful change for employees and the self-employed, and it may be worth reviewing reimbursements, payroll and expense systems ...
HMRC mileage rate increase provides a higher reimbursement for business travel expenses
This is a notable change for anyone who uses a personal car or van for work. The updated mileage allowance applies to the first 10,000 business miles in the tax year and is a long-awaited response to rising motoring costs.
For employees, the practical effect is straightforward!
If a business reimburses mileage at the HMRC-approved rates, the reimbursement can now be higher and remain tax-free under the usual rules. That matters because business mileage is one area where small changes can quietly make a meaningful difference over the course of a year.
The increase also affects the self-employed who claim travel expenses using HMRC mileage rates rather than calculating actual vehicle costs. For many, the simplicity of the mileage allowance is part of its appeal, and the rise in the HMRC mileage rate makes that route a little more generous from the start of the 26/27 tax year.
It is also worth noting that the rate above 10,000 miles remains at 25p per mile. That means the HMRC mileage rate rise helps most with the earlier miles in the year, which is often where many drivers do the bulk of their qualifying journeys anyway.
What makes this update particularly interesting is that it has been backdated to the 6th April 2026, even though the confirmation arrived in May. In other words, the revised figure applies to the entire tax year, so businesses and individuals may need to review how mileage has already been processed.
The mileage rate rise may also matter for staff who are reimbursed below the approved amount!
In some cases, they may be able to claim tax relief from HMRC for the difference, provided they meet the conditions. That is one of those details that can be easy to miss when travel expenses are handled informally.
For employers, this is a sensible time to review mileage reimbursement policies, payroll settings, and expense systems. A clean update now can help avoid confusion later, especially when HMRC rates are embedded in finance processes or employee handbooks.
The broader message is simple enough: the rise in the HMRC mileage rate brings the approved rate closer to today's running costs and provides both businesses and workers with a clearer benchmark.
For anyone tracking business mileage, this change is useful, and for many, it should make tax-free mileage claims a bit more rewarding.
If anything I've written in my blog post resonates with you and you'd like to discover more of my thoughts about the HMRC mileage rate rise, then do call me on 01908 774320 and let's see how I can help you.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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