The Government has confirmed a long-awaited increase to Approved Mileage Allowance Payments (AMAPs), alongside changes to Mileage Allowance Relief (MAR) and self-employed mileage rates.
The uplift, which is the first in 15 years, will be backdated to 6 April 2026 and applies across the 2026/27 tax year.
The headline change sees the rate for cars and vans rise from 45p to 55p per mile for the first 10,000 business miles. The existing rate of 25p per mile will continue to apply for mileage above this threshold. All other mileage rates remain unchanged.
Image: Engin Akyurt
For employers, the change creates an immediate decision point. Businesses can increase mileage reimbursement in line with the new rates and should review expense policies, payroll systems and any mileage claims already processed since the start of the tax year.
As the change is retrospective, employers adopting it may wish to revisit April and May payroll to ensure claims reflect the updated allowance.
Where employees are reimbursed at a rate below the new AMAP threshold, they remain able to claim tax relief on the difference through HMRC’s job expenses process. HMRC has confirmed that its claim forms are being updated to reflect the revised rates.
The changes also apply to the self-employed, who will be able to use the new mileage rates when submitting their 2026/27 Self Assessment returns.
Paul Hornby, Managing Director at JF Hornby & Co, said: “This is a sensible and long overdue change. The previous rate had been frozen since 2011, despite sustained increases in fuel, insurance and vehicle costs.
“For many employees and business owners, mileage claims have not reflected the true cost of travel for some time. While the increase is welcome, it is important that employers act quickly to review their policies and ensure claims are being handled correctly from the start of the tax year.”
