How to Claim Mileage Allowance Relief From HMRC

If your employer pays you less than HMRC’s approved rate for business miles in your own car or van, you can claim tax relief on the shortfall. The approved rate is 55p a mile for the first 10,000 business miles from 6 April 2026, then 25p. Claim online or through Self Assessment.

What is mileage allowance relief?

Mileage Allowance Relief (MAR) is tax relief on the unused part of the approved amount. HMRC’s business travel mileage rules say employees get “tax relief (called Mileage Allowance Relief, or MAR) on the unused balance” when their employer pays less than the approved amount.

The approved amount is the number of business miles multiplied by the HMRC rate: 55p for each of the first 10,000 miles in the tax year from 6 April 2026 (45p before), and 25p for every mile after that. The employee’s relief is on the difference between that amount and what the employer paid.

What can you claim for?

You can claim for business journeys in your own car or van, but not for ordinary commuting. HMRC’s guidance on tax relief for vehicles you use for work says the relief “does not include travelling to and from your work, unless it’s a temporary place of work”.

You can claim for the current tax year and the four previous tax years, if you are eligible. If your employer paid nothing for business miles, the whole approved amount is the unused balance.

How do you make an HMRC mileage claim?

There are two routes, and which you use depends on whether you already file a Self Assessment tax return.

1. You do not file Self Assessment: use HMRC’s online claim service on the GOV.UK page for vehicles you use for work.
2. You file Self Assessment: HMRC says you must claim through your tax return instead. Those completing a return cannot use the online service.

For either route you will need mileage logs. HMRC asks for copies showing:

• the reason for every journey
• the postcode for the start point of every journey
• the postcode for the end point of every journey

Start the log now if you have not got one. A simple spreadsheet is enough, as long as it carries those three items for each trip.

How much is the relief worth?

Work out the unused balance first, then apply your rate of tax to it. Here is an illustration, using your own figures in place of ours.

Step	Example
Business miles in the tax year	12,000
Approved amount (10,000 x 55p + 2,000 x 25p)	£6,000
Employer paid 40p a mile	£4,800
Unused balance	£1,200
Tax relief at 20%	£240

The 20% rate is for illustration. Use the rate of income tax you pay. The mileage rates tool calculates the approved amount for any mileage.

What do employers report?

An employer has two reporting jobs, depending on whether it pays above or below the approved amount. HMRC’s guidance sets out both:

• Paying more than the approved amount: you must “report on form P11D” and add the excess to the employee’s pay, deducting tax as normal.
• Paying less: the employee can claim MAR. Employers can optionally report the unused balances through the Mileage Allowance Relief Optional Reporting Scheme (MARORS).

National Insurance runs on a separate scheme. For cars and vans, the NI rate is 55p for every business mile from 6 April 2026 (45p before), with no 10,000 mile step. Payments above that amount are added to earnings for Class 1 National Insurance, but not for PAYE tax, through payroll. HMRC states there is “no Mileage Allowance Relief for National Insurance”.

The 55p rate is new this year. Mileage allowance 55p, what employers need to know covers the worked examples.

Is this the same as claiming advisory fuel rates?

No. Advisory fuel rates are for company cars and nothing is claimed back by the employee. MAR is for an employee’s own vehicle. The two are compared in advisory fuel rates vs mileage allowance.

Frequently Asked Questions

How do I claim mileage allowance relief?

If you do not file Self Assessment, use HMRC’s online claim service on GOV.UK. If you do, claim through your tax return. Either way you need mileage logs showing the reason, start postcode and end postcode for every journey.

How far back can I claim?

HMRC says you can claim for the current tax year and the four previous tax years, if you are eligible. Rates differ by year: 55p applies from 6 April 2026, and the rate was 45p before that.

Can I claim for my commute?

No. HMRC says the relief does not include travelling to and from your work, unless it is a temporary place of work.

What is the HMRC mileage rate in 2026?

For cars and vans it is 55p a mile for the first 10,000 business miles from 6 April 2026 and 25p after that. Motorcycles are 24p a mile and bicycles 20p a mile. The rate above 10,000 miles rises to 35p from 6 April 2027 (28 October 2026 Budget).

What does an employer report if it pays more than 55p?

HMRC says the employer must report the payments on form P11D and add anything above the approved amount to the employee’s pay, deducting tax as normal. Payments above the National Insurance qualifying amount are added to earnings for Class 1 National Insurance through payroll.

Do employers have to pay the full approved rate?

HMRC’s guidance describes what happens when you pay less or more, and the employee claims relief if the employer pays less. It does not say an employer must pay the approved rate. Your contract or expenses policy sets what is payable.

Cut your fleet’s fuel bill

Business mileage in employees’ own vehicles is paid at up to 55p a mile. Use the mileage rates tool to see what your annual business miles cost at 55p and 25p, then compare it with running the same miles in company vehicles.

For the vehicles you do own, a speed cap lowers the fuel bill. The Department for Transport’s fuel consumption curves (TAG data book v2.03, May 2026, published on GOV.UK) show a diesel car using 8.0% less fuel per mile at 62 mph than at 70 mph. The fleet-wide saving depends on the share of miles driven above the cap.

AutoKontrol has made speed limiters in Britain since 1985. To see what one could do for your fleet, book a free consultation or get a quote.