HMRC has announced that the Statutory Mileage Rate has increased for the first time in several years, and importantly, it has been backdated to 6 April 2026.

This change affects employees, directors, and business owners who use their own vehicles for work.

Below, we explain what’s changed, who it affects, and how to make sure you’re claiming correctly and tax-efficiently.

What Are the New Rates from 6 April 2026?

The updated rates are:

• Cars and vans:

- 55p per mile for the first 10,000 business miles (previously 45p)

- 25p per mile thereafter (unchanged)

• Motorcycles:

- 24p per mile (unchanged)

• Bicycles:

- 20p per mile (unchanged)

What Counts as Business Mileage?

You can only claim mileage for business journeys, such as:

✔ Travelling to meet clients
✔ Driving between workplaces
✔ Attending training or business events

🚫 You cannot claim for:

• Commuting to your normal place of work
• Personal trips

Who Does This Affect?

The updated mileage rates apply to:

Employees

If your employer reimburses mileage:

• Payments up to HMRC rates are tax-free
• If paid more, you pay tax on the excess
• If paid less, you can claim tax relief on the difference

👉 You should:

• Check if your employer will increase rates to 55p
• Ask whether they'll backdate the increase to 6 April 2026

If your employer doesn't reimburse mileage, you can claim tax relief on your business mileage from HMRC either on your Self-Assessment tax return or via the online form on the HMRC website.

Directors of Limited Companies

If you run a limited company:

• You can claim mileage from your company at the new 55p rate
• Don’t forget to update any mileage already claimed this tax year

💡 In many cases, claiming mileage is more tax-efficient than buying a car through the company, but this depends on your circumstances, check with your accountant.

If you employ staff:

• You don’t have to increase rates, but you may choose to
• Consider the commercial and staff retention impact of your decision

Sole Traders

Sole traders have two options:

1. Simplified expenses (mileage at the statutory mileage rates) - don't forget to use the new rate and update any claims you've already made this year.
2. Actual costs (including fuel, repairs etc.) adjusted for personal use.

For more information about these options, check out our previous blog on how they work (note that it has the old rate in).

⚠️ Don't forget that once you've made a decision for a particular car, you need to continue to use this method until you get a replacement car.

Tips to Maximise Your Claims

✅ Keep a detailed mileage log (dates, locations, purpose)

✅ Use apps or spreadsheets to track journeys

✅ Review whether mileage or actual costs is more beneficial

✅ Ensure your company policies align with the new rates

FAQs: Mileage Rate Increase 2026

What is the HMRC mileage rate for 2026/27?

From 6 April 2026:

• 55p per mile (first 10,000 miles)
• 25p per mile thereafter

Can I still claim 45p per mile?

Yes, but you would be under-claiming your allowable expenses.

Do I need to inform HMRC of the change?

No, simply apply the new rates from 6 April 2026 in your claims or payroll.

Does this apply to electric vehicles?

Yes, HMRC treats electric cars the same as petrol/diesel for mileage rates.

Can my company pay higher rates?

Yes, but anything above HMRC rates is taxable for you/your employees.

Final Thoughts from CJL Accountancy

The increase to 55p per mile is a welcome update, especially given rising motoring costs.

However, many individuals and businesses:

• Haven’t updated their claims
• Are still using the old rate
• Or aren’t claiming at all

Getting this right ensures you don’t lose out on valuable tax relief.

Need Help with Mileage Claims or Tax Planning?

At CJL Accountancy, we specialise in helping UK individuals and business owners stay compliant while minimising their tax liabilities.

📩 Get in touch today if you're looking for a proactive accountant.