AMAP rates
Employee's own vehicle
- Car or van, first 10,000 miles: 55p.
- Car or van, above 10,000 miles: 25p.
- Motorcycle: 24p.
- Bicycle: 20p.
- Passenger, per business passenger: 5p.
Business records
HMRC mileage rates 2026: what employers need to update now
HMRC raised the approved mileage rate to 55p in May 2026. Here is what UK employers must update, what records to keep and how to avoid common compliance errors.
May 2026 | Estimated read time: 6 min
On 21 May 2026, Chancellor Rachel Reeves announced the first increase to the approved mileage rate in 15 years. The change took effect from 6 April 2026, which means any mileage paid since the start of the tax year needs to be reviewed against the new figure.
If your expenses policy still shows 45p, it is out of date. If April and May claims have already been processed at the old rate, employees may have been underpaid and some payrolls may need correction.
The new AMAP rate: 55p per mile from 6 April 2026
The Approved Mileage Allowance Payment rate for cars and vans used by employees for business travel has increased from 45p to 55p per mile for the first 10,000 business miles in the tax year. The rate above 10,000 miles stays at 25p per mile. All other rates are unchanged: motorcycles remain at 24p per mile and bicycles at 20p per mile.
New AMAP rate
55p per mile
The uplift applies to the whole 2026/27 tax year from 6 April 2026, regardless of when the announcement was made.
What to do about claims already processed at 45p
Because the announcement came on 21 May with a backdated April start, most employers have already paid April and May claims at 45p. Employers can pay the shortfall for any business miles since 6 April 2026, without income tax or NIC being payable on the additional amount. Employees paid below 55p per mile can claim Mileage Allowance Relief on the shortfall through Self Assessment or form P87.
The practical priority is straightforward: update the expenses policy, recalculate any April and May underpayments and pay the balance.
AMAP versus Advisory Fuel Rates: two systems that must not be confused
HMRC operates two separate mileage frameworks. Applying the wrong one is one of the most frequently identified issues during employer compliance reviews.
Advisory Fuel Rates
Company cars from 1 June 2026
- Petrol: 14p, 17p or 26p depending on engine size.
- Diesel: 15p, 17p or 23p depending on engine size.
- Electric home charging: 7p.
- Electric public charging: 15p.
Why it matters
Do not mix the systems
AMAP applies when an employee uses their own vehicle and the employer reimburses per mile. Advisory Fuel Rates apply when an employee uses a company owned vehicle for business travel or repays private fuel used in a company car. Hybrid vehicles use the petrol or diesel AFR based on engine type.
A VAT registered employer can reclaim input VAT on the fuel element of mileage payments. This requires fuel receipts and a calculation using Advisory Fuel Rates, not the AMAP figure.
What a compliant mileage log needs to contain
HMRC does not prescribe a specific format, but the following fields are required to withstand review. A log missing any of them is not defensible.
Records should be kept for at least 22 months after the end of the tax year. Digital logs are acceptable provided they are contemporaneous. A spreadsheet completed from memory will not satisfy HMRC if the entries cannot be independently verified.
Travel between home and a permanent workplace is ordinary commuting and does not qualify. Travel to a temporary workplace can qualify, but the conditions should be documented each time.
Three process gaps that create audit risk
Most mileage problems stem from process failures rather than deliberate errors. The three that come up most often are:
- No threshold tracking. When an employee's mileage crosses 10,000 miles in a tax year, the AMAP rate drops from 55p to 25p. Without a running total per employee, overpayments continue at the higher rate.
- AMAP and AFR mixed in one policy. A single expenses form that does not clearly separate company car journeys from personal vehicle journeys leads to incorrect reimbursements and confused records.
- Stale rates carried forward. Advisory Fuel Rates change quarterly. Applying the same rate throughout the year can create overpayments, reportable taxable benefits or employee relief claims.
Advisory Fuel Rates need a quarterly review
Unlike AMAP rates, Advisory Fuel Rates are reviewed and updated by HMRC every quarter, usually on 1 March, 1 June, 1 September and 1 December. The previous rates remain valid for one month after new rates take effect, giving employers a short transition window.
From 1 June 2026, HMRC has continued its dual rate approach for electric vehicles, with separate reimbursement rates for home charging and public charging. Employers with electric company car drivers should record how the vehicle was charged during the journey period so the correct rate can be applied.
The practical step is simple: update the expenses system at the start of each quarter and give one person clear responsibility for checking the new HMRC figures.
How Crestfield Advisory can help
Keeping mileage records accurate is part of the broader bookkeeping discipline that makes year end reporting straightforward. Our Bookkeeping and Management Accounts team can help set up an expenses process that captures the right information at source, separates AMAP and AFR claims correctly, and keeps records in a format that supports both tax reporting and VAT recovery.
For businesses with more complex travel arrangements, including mixed fleets, frequent high mileage drivers or directors claiming significant business mileage, a review through our Business Tax service can confirm that the current approach is compliant and identify any historical corrections needed.
Reviewing the process going forward
- Has the expenses policy been updated to show 55p as the AMAP rate for 2026/27?
- Have April and May 2026 claims paid at 45p been reviewed?
- Does the claim form clearly separate company car journeys from personal vehicle journeys?
- Is there a running total of business miles per employee?
- Are Advisory Fuel Rates reviewed each quarter?
- Are claims approved before payment, with the approver name on the record?
- Are fuel receipts retained where VAT recovery on the fuel element is being claimed?
Related support
Bookkeeping & Management Accounts
We can help set up expense records, monthly bookkeeping checks and reporting routines so travel costs are easier to reconcile.
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