The 15-Year Freeze is Over: What the New HMRC Mileage Rates Mean for Your Business

For the first time since 2011, HMRC has increased the Approved Mileage Allowance Payment (AMAP) rate to help businesses and employees combat years of rising fuel costs.

Crucially, this change applies retrospectively from 6 April 2026. If you claim mileage or reimburse employees, you must update your records immediately.

The New Mileage Rates

The update specifically changes the first tier of driving for cars and vans:

• Cars & Vans (First 10,000 miles): Increased from 45p to 55p per mile.
• Cars & Vans (Over 10,000 miles): Remains at 25p per mile.
• Motorcycles & Bicycles: Remain frozen at 24p and 20p per mile.

Handling the Backdated Gap

Because the increase is backdated to April, you may have spent months under-reimbursing staff at the old 45p rate. You have two ways to handle this:

1. Pay the Difference: Retroactively pay employees the extra 10p per mile for trips taken since 6 April 2026.
2. Let Staff Claim Relief: Stick to the old rate and let employees claim Mileage Allowance Relief directly on their own tax returns.

Next Steps for Your Business

Update your accounting and payroll software parameters to the new 55p benchmark immediately. If you accidentally pay above the new threshold, the excess becomes a taxable benefit that must be run through payroll.

Macmillan Coffee Morning

25 September · from 09:30

Join us for coffee, cake and good conversation as we raise money for Macmillan Cancer Support. Everyone is welcome to pop in.