If you use your own vehicle for work, your employer may reimburse you for your business travel through Approved Mileage Allowance Payments (AMAP). These payments can be made tax-free, provided they do not exceed HMRC’s approved mileage rates.
What Are Approved Mileage Allowance Payments (AMAP)?
Approved Mileage Allowance Payments (AMAP) are payments made by employers to employees who use their own vehicle for business journeys.
The payments are free from Income Tax if they do not exceed the HMRC-approved mileage allowance.
The tax-free amount is calculated by multiplying the total business miles travelled during the tax year by the approved mileage rate for the relevant vehicle.
Important: The approved amount is calculated across the entire tax year, not for each individual journey.
HMRC Approved Mileage Rates for 2026/27
At the time of writing, the standard HMRC approved mileage rates are:
| Vehicle | Approved Rate |
| Cars & Vans (first 10,000 business miles) | 45p per mile |
| Cars & Vans (over 10,000 business miles) | 25p per mile |
| Motorcycles | 24p per mile |
| Cycles | 20p per mile |
If HMRC announces any future changes to these rates, employers should update their mileage reimbursement policies accordingly.
When Mileage Payments Are Tax-Free
If your employer pays up to the approved mileage amount, the payment is completely tax-free.
Example 1
Andy drives 15,000 business miles during the 2026/27 tax year.
His employer pays 45p per mile.
Mileage received
15,000 × 45p = £6,750
Approved amount
- First 10,000 miles × 45p = £4,500
- Remaining 5,000 miles × 25p = £1,250
Total approved amount = £5,750
Since the payment exceeds the approved amount, £1,000 (£6,750 − £5,750) is taxable.
Can You Claim Tax Relief If Your Employer Pays Less?
Yes.
If your employer pays less than HMRC’s approved mileage rate, you may be able to claim Mileage Allowance Relief on the difference.
Example 2
Ben drives 6,000 business miles.
His employer pays 40p per mile.
Mileage received
6,000 × 40p = £2,400
Approved amount
6,000 × 45p = £2,700
Ben can claim tax relief on the £300 shortfall.
What Happens If Your Employer Pays More Than the Approved Rate?
The approved mileage amount is the maximum tax-free amount allowed by HMRC.
If your employer pays more than this amount, the excess is treated as taxable earnings, even if your actual motoring costs are higher.
Example 3
Callum drives 25,000 business miles using his own van.
His employer pays 45p per mile for every mile travelled.
Mileage received
25,000 × 45p = £11,250
Approved amount
- First 10,000 miles × 45p = £4,500
- Remaining 15,000 miles × 25p = £3,750
Total approved amount = £8,250
The excess payment is:
£11,250 − £8,250 = £3,000
The £3,000 excess is taxable.
National Insurance Rules
A similar system applies for Class 1 National Insurance, but there is an important difference.
For National Insurance purposes, the higher rate for cars and vans applies to all business miles, not just the first 10,000 miles.
This means that an employee may have an Income Tax liability on mileage payments that exceed the approved amount, while National Insurance may not be payable on the same excess.
Frequently Asked Questions (FAQs)
Can I claim mileage if my employer pays less than the HMRC rate?
Yes. If your employer pays below the approved mileage allowance, you may be able to claim tax relief on the difference.
Is the mileage allowance tax-free?
Yes, provided the payment does not exceed HMRC’s approved mileage rates.
Does the 45p rate apply to every mile?
No. For Income Tax purposes, the 45p rate applies only to the first 10,000 business miles for cars and vans during the tax year. Any additional business miles are paid at 25p per mile.
Are commuting journeys included?
No. Ordinary commuting between your home and permanent workplace does not count as business mileage.
Does AMAP apply to motorcycles and bicycles?
Yes. Motorcycles qualify for 24p per mile, while bicycles qualify for 20p per mile.