The HMRC Approved Mileage Allowance Payment (AMAP) scheme sets the tax-free rate at which an employer can reimburse an employee — or an employee can claim back themselves — for using their own vehicle on business journeys. The rates have been frozen since 2011-12 despite inflation eroding their real value by 40%+ over the period. The 2026-27 rates remain the same as 2025-26:
| Vehicle type | First 10,000 business miles | Each mile thereafter |
|---|---|---|
| Car or van | 45p | 25p |
| Motorcycle | 24p | 24p |
| Bicycle | 20p | 20p |
| Passenger (additional, each passenger on business journey) | 5p | 5p |
The rates are statutory under Section 230 ITEPA 2003 and Schedule 4 — they apply across England, Scotland, Wales, and Northern Ireland identically.
This guide explains the AMAP mechanics, the difference between employer reimbursement and self-claim, the records HMRC requires, and the three categories of journey that qualify as “business mileage”.
For mileage calculation, see the Mileage Allowance Calculator.
1. The 10,000-mile threshold reset
The 45p rate applies to the first 10,000 business miles in a tax year. Beyond 10,000 miles, the rate drops to 25p/mile. The threshold:
- Resets each 6 April (start of the new tax year).
- Is per employee, per employer — if an employee has two employers using the same car for business, each employer counts independently.
- Cannot be aggregated across years — unused 10,000-mile capacity does not carry forward.
For a sales rep driving 18,000 business miles in 2026-27:
- First 10,000 miles × 45p = £4,500 tax-free.
- Next 8,000 miles × 25p = £2,000 tax-free.
- Total tax-free reimbursement: £6,500.
If the employer paid the rep £0.50/mile on all 18,000 miles (£9,000 total), the £6,500 is tax-free, and the excess £2,500 is taxable as employment income. The employer cannot deduct the excess from their corporation tax bill unless it’s correctly accounted as salary.
2. Employer reimbursement vs employee self-claim
The choice depends on whether the employer pays anything at all.
Scenario A: Employer pays full AMAP
The employer pays the AMAP rate (45p/25p), reports it on payroll, and there is no further action needed. The employee receives full reimbursement and pays no tax on it.
Scenario B: Employer pays less than AMAP (or nothing)
The employee can claim the shortfall as a tax deduction. For an employee who drove 5,000 business miles and was reimbursed at 25p/mile:
- AMAP entitlement: 5,000 × 45p = £2,250.
- Actually received: 5,000 × 25p = £1,250.
- Shortfall claimable: £1,000.
The £1,000 is claimed as Mileage Allowance Relief (MAR):
- Via Form P87 (Self Assessment not required) — for claims up to £2,500/year.
- Via Self Assessment — for claims above £2,500/year or if SA is already filed for other reasons.
The relief reduces taxable income by £1,000, generating a tax refund at the employee’s marginal rate. At 20% basic rate: £200 refund. At 40% higher rate: £400 refund.
Scenario C: Employer pays more than AMAP
Excess is taxable employment income reported on Form P11D. The employer pays Class 1A NI (15% in 2026-27) on the excess; the employee pays income tax and NI through PAYE. There is no tax-efficient mechanism for the employer to pay over AMAP — best practice is to set reimbursement at or below 45p/25p.
3. What qualifies as “business mileage”
HMRC’s narrow definition: travel wholly, exclusively, and necessarily for business — excluding ordinary commuting and private use.
Qualifying business mileage
- Travel to a temporary workplace (defined under §339 ITEPA — generally a workplace for less than 24 months).
- Travel between two workplaces of the same employer.
- Travel to a client’s site (where the employee normally works from another location).
- Travel to attend a training course mandated by the employer (subject to specific tests).
- Site-to-site travel within the working day.
Non-qualifying mileage (ordinary commuting)
- Travel from home to the permanent workplace.
- Travel from home to a workplace the employee has been at, or expects to be at, for more than 24 months continuously.
- Travel that is “of like character” to ordinary commuting — e.g., a slight detour to drop off children at school on the way to work.
The 24-month rule for temporary workplaces is the most common dispute area. If an employee is seconded to a client site for 18 months on a 6-month renewable basis, the entire period is qualifying business mileage — but the moment the secondment is extended beyond 24 months (or expected to be extended), the entire period retroactively becomes non-qualifying ordinary commuting.
4. The “passenger” 5p add-on — when it applies
The 5p passenger rate applies when the employee carries another employee from the same employer on a business journey. It’s added to the AMAP rate paid for that journey:
- Employee drives 50 miles with one colleague (same employer) on business: 50 miles × (45p + 5p) = £25.
- Two colleagues: 50 miles × (45p + 5p + 5p) = £27.50.
The passenger payment can only be paid as tax-free reimbursement — it cannot be claimed by the employee via P87 / Self Assessment. So if the employer doesn’t pay the 5p passenger rate, the employee gets nothing for the passenger journey beyond the regular driver-only AMAP.
Passenger payments are limited to colleagues at the same employer on the same business journey — not family members, not clients, not partners at a different firm.
5. Records HMRC requires
For tax-free AMAP reimbursement (employer pays) or AMAP claim (employee claims), HMRC requires contemporaneous records showing:
- Date of the business journey.
- Reason for travel (which client, which meeting, which site).
- From and to addresses (or postcodes).
- Mileage (computed via Google Maps, AA Route Planner, or vehicle odometer reading).
- Total miles for the tax year (running cumulative).
A simple Excel log or app-based mileage tracker (e.g., MileIQ, TripLog) is sufficient. HMRC investigations have rejected reconstructed-from-memory mileage claims — the records must be contemporaneous or at minimum supported by diary entries / appointment calendars.
For private mileage in a company car, a separate mileage log is required to substantiate the BIK calculation — see the Company Car Tax Calculator for the company-car-specific rules.
6. Self-employed mileage — same rates, different scheme
A self-employed individual using their car for business can choose between two methods:
Simplified expenses (uses AMAP rates)
The same 45p/25p AMAP rates apply. Claimed as part of Self Assessment in the trading allowance calculation, with the per-mile method replacing the “actual cost” approach.
Once chosen for a given vehicle, the method must be used for the entire ownership period of that vehicle. A self-employed taxpayer cannot switch from actual costs to mileage allowance mid-life. They can, however, use different methods for different vehicles.
Actual costs
For each business mile, claim the proportion of actual vehicle costs (fuel, insurance, MOT, servicing, depreciation, finance) corresponding to business use percentage. More complex but can yield higher relief for high-mileage commercial vehicles where the 45p/25p is less than actual per-mile cost.
The decision rule: for compact cars driven moderate business mileage (<15,000/year), AMAP is usually higher. For larger vans, expensive cars, or commercial vehicles with high running costs, actual costs may win.
See the self-assessment checker for whether you’re required to file.
7. Electric vehicle business mileage
Electric vehicles use the same 45p/25p AMAP rates as petrol/diesel for employee-owned EVs. The rate is not adjusted for the lower per-mile electricity cost.
For company-owned EVs, the position is different:
- Employees using a company EV for business get an advisory electricity rate (AER) — 9p/mile in 2026 — for tax-free reimbursement from the employer.
- Or the employer can use the AMAP rate (45p/25p) only if the employee is using a private EV for company business, not the company’s car.
The AER is updated quarterly by HMRC. Check current rates at the HMRC advisory fuel rates page.
8. Why the rate has been frozen since 2011-12
The 45p/25p rates were set in April 2011 by HMRC. They have not been increased despite:
- Cumulative UK inflation 2011-2026: approximately 45%.
- Cumulative petrol price increase 2011-2026: approximately 35%.
- Hybrid/EV running cost reductions: highly variable, but cars purchased since 2018 generally cost less per mile to run than the 2011 baseline used by HMRC.
The freeze is politically intentional — Treasury has held the rate constant to maintain real-terms reduction of the tax-free mileage benefit while inflation continues. Various industry groups (Driver and Vehicle Standards Agency consultees, Royal Society for the Prevention of Accidents, AA, RAC) have lobbied for an increase; no Budget has yet acted.
For employees, the practical effect is that AMAP no longer covers the real cost of running a private car for business — particularly for high-mileage drivers in modern vehicles with higher per-mile depreciation.
For the practical decision on whether to use a company car vs private car for high business mileage, see the related MAP vs Self-Claim guide.