Mileage Calculator

For the 2026/27 tax year, the approved mileage allowance payment rates remain at 45p per mile for the first 10,000 business miles. For any distance exceeding 10,000 miles in the tax year, the rate drops to 25p per mile. These rates apply to both cars and vans and are tax-free for employees and self-employed individuals.

Motorcycles and mopeds attract a fixed rate of 24p per mile for all business miles travelled in the 2026/27 tax year. Bicycles have a lower approved rate of 20p per mile for all business journeys. These amounts are paid tax-free and can be claimed against income tax or national insurance liabilities.

Yes, you can claim tax relief on the difference if your employer pays you less than the HMRC approved rates. For example, if your employer pays 30p per mile, you can claim the remaining 15p per mile for the first 10,000 miles as a tax deduction. This applies to both employees and self-employed individuals who do not receive a full allowance.

The £500 dividend allowance for 2026/27 is unrelated to mileage claims as they operate under different tax categories. Mileage payments are treated as employment or business expenses, whereas the dividend allowance relates to income from shares. Therefore, claiming approved mileage does not reduce your available dividend allowance.

You must maintain a detailed mileage logbook recording the date, destination, business purpose, and total miles for each journey. For the 2026/27 tax year, these records must be kept for at least five years and four months after the end of the relevant tax year. Digital apps are acceptable provided they capture all necessary data points required by HMRC.