Go Back

The mileage allowance for people using their vehicle for work has increased for the first time since 2011.

The UK Government announced the main mileage rate has been increased from 45p to 55p for the first 10,000 business miles, backdated to 6 April 2026. 

The rate above 10,000 miles per tax year remains at 25p, and there are no changes to motorcycle, bicycle, or passenger rates at this stage. 

Practical considerations: 

• Employer reimbursements up to 55p per mile are tax and NIC free 
• Where employers reimburse at a lower rate (or not at all), employees can claim tax relief on the shortfall 
• Where payments exceed 55p, the excess is taxable and subject to NIC 

Employers who have already processed payroll for April and May 2026 may need to review mileage payments and consider whether any payroll adjustments are required. 

If you have any questions or need any support implementing these changes, please contact our tax team for expert guidance today.