Business Mileage Allowance Calculator UK
Work out your tax-free mileage at HMRC’s approved rates — and see whether you’re quietly losing money on a rate that’s been frozen since 2011 while running costs soared.
When you use your own car or van for business journeys, HMRC lets you claim or be reimbursed 45p per mile for the first 10,000 business miles, then 25p a mile after that — tax-free. These are the Approved Mileage Allowance Payment (AMAP) rates, and they cover everything: fuel, insurance, road tax, servicing, and wear and tear in one flat figure. Drive 12,000 business miles and that’s £5,000 you can claim without paying a penny of tax. The catch most people miss is that these rates have been frozen since 2011 while motoring costs have risen by roughly 39% — so if your employer reimburses you below 45p, you can claim the shortfall back as Mileage Allowance Relief, and if you’re self-employed you’ll want to check whether the flat rate still beats claiming your actual costs. The other trap is mixing up AMAP (your own vehicle) with the separate Advisory Fuel Rates that apply to company cars — using the wrong one is a classic HMRC compliance finding. This calculator shows your tax-free allowance and the relief you may be owed. For the bigger picture, use the Freelancer Day Rate Calculator and the Self-Employed Tax Calculator.
Business mileage
Reimbursement and tax relief
Passengers and VAT on fuel
Business impact
Mileage allowance result
Approved mileage amount
Calculating…
Calculating…
Amount reimbursed
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Mileage relief gap
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Tax relief estimate
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Taxable excess
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Passenger allowance
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VAT on fuel estimate
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Business mileage allowance — quick lookup
The left table shows your tax-free allowance at the approved car and van rates for common annual mileages. The right lists the rate for each vehicle type. The headline is in the left table: the 45p rate drops to 25p after 10,000 miles, so high-mileage drivers earn proportionally less per mile across the year.
| Business miles | Tax-free allowance |
|---|---|
| 2,000 | £900 |
| 5,000 | £2,250 |
| 8,000 | £3,600 |
| 12,000 | £5,000 |
| 15,000 | £5,750 |
| Vehicle | First 10k | Over 10k |
|---|---|---|
| Car / van | 45p | 25p |
| Motorcycle | 24p | 24p |
| Bicycle | 20p | 20p |
| Passenger | +5p | +5p |
| EV / hybrid | 45p | 25p |
The car and van allowance is 45p for the first 10,000 business miles in the tax year, then 25p. So 12,000 miles is (10,000 × 45p) + (2,000 × 25p) = £5,000. Motorcycles get a flat 24p and bicycles a flat 20p, with no step-down. The passenger rate of 5p per mile is on top, for each qualifying business passenger. Electric and hybrid vehicles use the same car rates — there’s no separate EV rate, which makes the allowance especially generous for EV drivers.
How business mileage allowance works
The approved mileage allowance is a flat, tax-free rate per business mile that covers all your vehicle’s running costs in one figure. It’s simple in principle, but who you are — employee, director, or self-employed — changes how you claim it, and a couple of details catch people out every year.
The approved rates and the 10,000-mile step
For a car or van you can claim 45p for the first 10,000 business miles in the tax year, then 25p for every mile after that. The threshold is per person, per tax year (6 April to 5 April), and resets each year — it isn’t per trip, per month, or per employer. Motorcycles are a flat 24p and bicycles a flat 20p, with no step-down at 10,000. The single rate is designed to cover fuel, insurance, road tax, MOT, servicing, tyres and depreciation, so you generally can’t claim those costs separately on top.
What counts as a business mile
Business mileage is travel you make for work that isn’t your normal commute — driving to a client, a supplier, a job site, or a temporary workplace. The trap is commuting: home to a permanent workplace never counts, even if you take a work call on the way. A temporary workplace you expect to attend for under 24 months does count; once you expect it to last more than 24 months it’s treated as permanent, and the travel becomes commuting. Parking, tolls, and congestion charges can be claimed separately under either method, as they’re not covered by the per-mile rate.
How you claim depends on who you are
An employee whose employer reimburses below the approved rate can claim the shortfall as Mileage Allowance Relief, via Self Assessment or Form P87. A limited company director can have their company reimburse them up to 45p tax-free for using a personal vehicle. The self-employed deduct mileage as a business expense, and choose between the simplified flat rate and claiming actual costs. In every case, if a payment is at or below the approved rate there’s no tax to pay; pay above it and the excess becomes taxable.
Worked examples
Four scenarios showing how the allowance and the relief work in different situations.
Scenario 1 · Standard claim, under 10,000 miles
Straightforward at 45p
Allowance: 8,000 × 45p = £3,600
Tax relief at 20%: £720 · at 40%: £1,440
A field salesperson drives 8,000 business miles in their own car and gets no mileage reimbursement from their employer. They can claim the full £3,600 as Mileage Allowance Relief. The actual cash back is the tax relief on that figure — £720 for a basic-rate taxpayer, £1,440 for a higher-rate one. This is the simplest case: all miles fall under the 10,000 threshold, so the whole claim is at 45p.
Scenario 2 · High mileage, crossing 10,000
The drop to 25p
(10,000 × 45p) + (5,000 × 25p)
= £4,500 + £1,250 = £5,750
A regional engineer driving 15,000 business miles sees the rate step down. The first 10,000 miles earn 45p (£4,500), but the remaining 5,000 earn only 25p (£1,250), for £5,750 in total. The 25p rate is meant to reflect that fixed costs like insurance and road tax are already covered by the first 10,000 miles, leaving mainly fuel and wear. High-mileage drivers feel the frozen-rate squeeze most.
Scenario 3 · Reimbursed below the rate
Claiming the shortfall
Shortfall: 5,000 × 20p = £1,000 claimable
Mileage Allowance Relief at 20%: £200 back
An employee whose employer pays only 25p a mile is being reimbursed below the approved 45p rate. They can claim Mileage Allowance Relief on the 20p shortfall — £1,000 over 5,000 miles — through their tax return or Form P87. The cash benefit is the tax relief on that, £200 at the basic rate. Many employees never realise they’re owed this, which is exactly where the frozen rate quietly costs people money.
Scenario 4 · Self-employed, high mileage van
When actual costs win
Simplified: (10k × 45p) + (15k × 25p) = £8,250
Actual costs (fuel, insurance, tax, servicing): ~£12,000
A self-employed tradesperson doing 25,000 miles a year in a van may find the flat rate (£8,250) falls well short of their real running costs (perhaps £12,000+). In that case, claiming actual costs in proportion to business use is more generous. The catch: once you choose actual costs for a vehicle, you must stick with that method for that vehicle’s lifetime — so the choice at the start matters. For most lower-mileage modern cars, the simplified rate still wins.
Three rates everyone confuses — and which one is yours
Most of the trouble with mileage comes from mixing up three different things that all sound similar. Using the wrong one is one of the most common findings in an HMRC compliance review. Here’s how they differ, and which applies to you:
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1
AMAP — your own vehicle
The Approved Mileage Allowance Payment is the 45p/25p rate for using your personal car or van for business. It covers all running costs and is tax-free up to the approved amount. This is the rate this calculator works on, and the one most people mean by “mileage allowance.”
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2
AFR / AER — company cars
Advisory Fuel Rates (and the Advisory Electric Rate, around 7p) are for company cars, not your own vehicle. They’re used when an employee repays private fuel or is reimbursed for business fuel in a company car. Set quarterly, they’re far lower than AMAP. Using these for a personal car is the classic error.
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3
MAR — the relief mechanism
Mileage Allowance Relief is not a rate but a claim: if your employer reimburses you below the AMAP rate, you claim tax relief on the shortfall. It’s how employees recover the gap between, say, 25p paid and 45p approved. You get back the tax on the difference, not the difference itself.
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The frozen-rate squeeze
The AMAP rate has been frozen at 45p since 2011, while motoring costs have risen by roughly 39%. So even a full 45p reimbursement covers less of your real cost than it used to — and anything below 45p leaves you genuinely out of pocket on every mile.
5,000 business miles — reimbursed at 25p instead of 45p
What the shortfall and relief actually come to:
That £1,000 shortfall doesn’t all come back — Mileage Allowance Relief returns the tax on it, so £200 at the basic rate or £400 at the higher rate. But it’s money most employees simply never claim, because they assume the reimbursement they got was the whole story. The practical takeaway is to know which of the three rates applies to your situation: AMAP if you drive your own vehicle, AFR if it’s a company car, and MAR as the route to claim back any shortfall against AMAP. Get those straight and you neither overclaim (which HMRC will find) nor underclaim (which quietly costs you).
Simplified rate vs actual costs — the self-employed choice
If you’re self-employed, you pick between the simplified mileage method (the 45p/25p rates) and claiming your actual costs — fuel, insurance, tax, MOT, servicing and depreciation, apportioned to business use. For most people with a reasonably economical modern car and moderate mileage, the flat rate is simpler and often more generous. Actual costs tend to win only at very high mileage or with expensive-to-run vehicles. The important catch: once you’ve claimed actual costs for a particular vehicle, you must continue with actual costs for that vehicle’s whole life, so choose deliberately when you first use the vehicle for business. Use the Self-Employed Tax Calculator to see how the deduction flows through to your tax.
Two scenarios that change the picture
What if…
You carry a colleague on business trips?
What if…
You drive an electric car for business?
Key mileage allowance terms explained
Business mileage brings together HMRC’s approved rates, the relief mechanism, and the rules on what counts as a business journey. The ten terms below cover what you’ll meet when claiming.
- AMAP (Approved Mileage Allowance Payment)
- HMRC’s approved rate for using your own vehicle for business — 45p then 25p for cars and vans. Payments at or below this rate are tax-free; pay above it and the excess is taxable. The core rate this calculator uses.
- Business mileage
- Travel for work that isn’t your normal commute — to a client, supplier, job site, or temporary workplace. Home to a permanent workplace never counts, even if you take a work call on the way.
- 10,000-mile threshold
- The point at which the car and van rate drops from 45p to 25p. It’s per person, per tax year, and resets every 6 April — not per trip or per employer. If you change jobs mid-year, your cumulative miles carry across.
- Mileage Allowance Relief (MAR)
- The claim an employee makes when reimbursed below the approved rate. You claim tax relief on the shortfall between what you were paid and the AMAP figure, via Self Assessment or Form P87 — you get the tax back, not the full shortfall.
- Advisory Fuel Rates (AFR)
- A separate, much lower set of rates for company cars, not your own vehicle, set quarterly. Used when an employee repays private fuel or is reimbursed for business fuel in a company car. Confusing AFR with AMAP is a common error.
- Advisory Electric Rate (AER)
- The company-car equivalent of AFR for electric vehicles, around 7p per mile. It applies only to company EVs, not to a personal EV used for business — which uses the full 45p/25p AMAP rate instead.
- Passenger payment
- An extra 5p per mile per qualifying business passenger, paid tax-free on top of the AMAP rate. Only an employer can pay it; you can’t claim the passenger rate as relief if your employer doesn’t.
- Temporary workplace
- A site you attend for a limited period of under 24 months, travel to which counts as business mileage. Once you expect to be there more than 24 months, it’s treated as permanent and the journey becomes commuting.
- Simplified expenses
- The flat-rate mileage method for the self-employed — using 45p/25p instead of tracking actual costs. The alternative is claiming actual running costs apportioned to business use, but you can’t mix the two for one vehicle.
- Form P87
- The form an employee uses to claim tax relief on expenses, including mileage, without filing a full Self Assessment return. It’s the usual route for claiming Mileage Allowance Relief when an employer reimburses below the approved rate.
Five mistakes people make with business mileage
Business mileage is simple in principle but easy to get wrong, and HMRC can ask to see your logs going back several years. These five errors, drawn from recurring r/UKPersonalFinance and r/SmallBusinessUK threads and HMRC compliance findings, are the costly ones.
Claiming the commute as business mileage
Home to a permanent workplace never counts, even if you take a work call on the way. It’s one of the most common compliance findings. Travel to a client or a temporary workplace does count, but your ordinary commute doesn’t — make sure your records and expenses policy are clear on the difference.
Cost: disallowed claims and penalties Fix: exclude home-to-permanent-workplace milesUsing company-car rates for a personal vehicle
AMAP (45p/25p) is for your own vehicle; Advisory Fuel Rates are for company cars. Mixing them up is one of the most frequent findings in an HMRC employer compliance review. If you drive your personal car, use AMAP — the much lower AFR figures don’t apply to you.
Cost: under-reimbursed or non-compliant Fix: AMAP for own car, AFR for company carNot claiming relief when reimbursed below 45p
If your employer pays under the approved rate, you can claim Mileage Allowance Relief on the shortfall — yet most employees never do. On 5,000 miles reimbursed at 25p instead of 45p, that’s a £1,000 shortfall and £200 of tax back at the basic rate. Check whether you’re owed relief each year.
Cost: tax relief left unclaimed Fix: claim MAR via P87 or Self AssessmentLosing track of the 10,000-mile threshold
The step from 45p to 25p applies across the whole tax year, not per trip or per month. Claiming 45p after you’ve passed 10,000 miles overstates the allowance. Track cumulative business miles through the year so you drop to 25p at the right point and your claim stands up to scrutiny.
Cost: overclaiming past 10,000 miles Fix: track cumulative miles across the yearKeeping no mileage log
HMRC can ask to see mileage records going back several years. A claim with no log of dates, destinations, purpose, and miles is hard to defend. Whether you use an app or a spreadsheet, record each business journey as you go — reconstructing a year of trips from memory rarely survives an enquiry.
Cost: claims disallowed without evidence Fix: log every business trip as it happensFrequently asked questions
What is the business mileage allowance in the UK?
It’s HMRC’s approved tax-free rate for using your own vehicle on business journeys: 45p per mile for the first 10,000 business miles in the tax year, then 25p for cars and vans. Motorcycles get a flat 24p and bicycles 20p.
The rate covers all your running costs — fuel, insurance, road tax, servicing, and wear — in one figure, so you generally can’t claim those separately. Payments at or below the rate are tax-free; anything above it becomes taxable income.
What are the HMRC approved mileage rates?
For cars and vans, 45p per mile up to 10,000 business miles a year, then 25p. Motorcycles are a flat 24p for all miles, and bicycles a flat 20p. You can also claim an extra 5p per mile for each business passenger you carry.
These Approved Mileage Allowance Payment (AMAP) rates apply equally to petrol, diesel, hybrid, and electric vehicles — there’s no separate EV rate. They’ve been frozen at this level since 2011, despite significant rises in motoring costs.
What counts as a business mile?
A business mile is travel for work that isn’t your normal commute — driving to a client, supplier, job site, or temporary workplace. Home to a permanent workplace never counts, even if you take a work call on the way.
A temporary workplace you expect to attend for under 24 months does count. Once you expect to be there more than 24 months, it’s treated as a permanent workplace and the journey becomes commuting. Parking, tolls, and congestion charges can be claimed separately, as they’re not covered by the per-mile rate.
Can I claim mileage if my employer pays less than 45p?
Yes. If your employer reimburses below the approved rate, you can claim Mileage Allowance Relief on the shortfall through Self Assessment or Form P87. On 5,000 miles paid at 25p instead of 45p, that’s a £1,000 shortfall.
You don’t get the full shortfall back — you get tax relief on it, so £200 at the basic rate or £400 at the higher rate. Many employees never realise they’re owed this, which is where the frozen rate quietly costs people money. Check each tax year whether you have a claim.
What’s the difference between AMAP and Advisory Fuel Rates?
AMAP (45p/25p) is for using your own vehicle for business and covers all running costs. Advisory Fuel Rates are a separate, much lower set of rates for company cars, used when an employee repays private fuel or is reimbursed for business fuel in a company car.
Using the wrong set is one of the most common findings in an HMRC employer compliance review. If you drive your personal car, AMAP applies; if it’s a company car, AFR (or the Advisory Electric Rate for EVs) applies. They’re not interchangeable.
Do electric cars get a different mileage rate?
For a personal EV used for business, no — you claim the same 45p/25p as a petrol or diesel car. There’s no separate, lower AMAP rate for electric vehicles, even though electricity typically costs only 4–7p a mile, which makes the allowance very generous for EV drivers.
Don’t confuse this with the Advisory Electric Rate of around 7p, which applies only to company electric cars. For your own EV on business journeys, the full car AMAP rate is what you use.
Should I use the mileage rate or claim actual costs?
If you’re self-employed, you choose between the simplified mileage method (45p/25p) and claiming actual costs — fuel, insurance, tax, servicing, depreciation — apportioned to business use. For most people with an economical modern car and moderate mileage, the flat rate is simpler and often more generous.
Actual costs tend to win only at very high mileage or with expensive-to-run vehicles. The catch: once you claim actual costs for a vehicle, you must keep using actual costs for that vehicle’s whole life, so choose deliberately when you first use it for business. See gov.uk.
How do I record business mileage for HMRC?
Keep a log of each business journey: the date, destination, purpose, and miles. HMRC can ask to see your records going back several years, and a claim with no supporting log is hard to defend in an enquiry.
You can use a mileage-tracking app, your phone’s GPS, or a simple spreadsheet — what matters is recording trips as you make them rather than reconstructing a year from memory. Good records are what turn a correct claim into a defensible one.
Related calculators
Business mileage is one expense among many for the self-employed and company directors. These calculators handle the income, tax, and structure around it.
Methodology & sources
How the maths works
The calculator multiplies your business miles by HMRC’s approved rate for your vehicle, applying the step-down for cars and vans: the first 10,000 miles at 45p and any miles beyond at 25p, so 12,000 miles gives (10,000 × 45p) + (2,000 × 25p) = £5,000. Motorcycles use a flat 24p and bicycles a flat 20p with no step. Where an employer reimburses below the approved rate, it works out the shortfall against AMAP and shows the Mileage Allowance Relief — the tax recoverable on that shortfall at your marginal rate. The passenger rate of 5p per mile is added separately for each qualifying business passenger. For the self-employed, it presents the simplified flat-rate figure alongside a note that actual costs may be more generous at high mileage.
These are illustrative comparisons based on the current approved rates. Real outcomes depend on your exact business mileage, your vehicle, what your employer reimburses, your tax band, whether you’re an employee, director, or self-employed, and the current rates, which can change. The aim is to show your tax-free allowance, any relief you may be owed, and which of the three mileage rates applies to you, not to replace tailored tax advice.
Assumptions and conventions used
- Car / van: 45p first 10,000 business miles, 25p thereafter
- Motorcycle: 24p flat · Bicycle: 20p flat
- Passenger: +5p per mile per qualifying business passenger
- 10,000-mile threshold: per person, per tax year, resets 6 April
- Mileage Allowance Relief: tax on the shortfall vs the approved rate
- EV / hybrid: same 45p/25p as petrol; AMAP, not the company-car AER
- Commuting and home-to-permanent-workplace miles excluded
- Rates shown are illustrative current UK figures, frozen since 2011