The approved mileage rate had been 45p a mile since 2011/12 — fifteen years of frozen relief against a decade and a half of fuel prices. From 6 April 2026 it is 55p for the first 10,000 business miles. For a van-based trade doing serious miles it is one of the few tax changes this year that puts money back rather than taking it, and it is worth checking your bookkeeping has actually picked it up.
Article · 30 June 2026
| Rate | 2011/12 to 2025/26 | 2026/27 |
|---|---|---|
| Cars and vans, first 10,000 business miles | 45p | 55p |
| Cars and vans, each mile over 10,000 | 25p | 25p |
| Motorcycles | 24p | 24p |
| Bicycles | 20p | 20p |
It applies from 6 April 2026, with retrospective effect, to both employee approved mileage allowance payments and the self-employed simplified mileage rates. The NIC "relevant motoring expenditure" disregard also rises to a flat 55p.
Only the first band moved. The 25p rate above 10,000 miles, the motorcycle rate and the bicycle rate are all unchanged — so the change is worth a maximum of £1,000 a year per vehicle, at 10,000 miles.
A local sparky, 6,000 business miles. 6,000 × 55p = £3,300, against £2,700 on the old rate. £600 more relief. At basic rate income tax plus 6% Class 4 NIC, that is about £156 of tax saved.
A regional plumber, 14,000 business miles. 10,000 × 55p = £5,500, plus 4,000 × 25p = £1,000. Total £6,500, against £6,500 — wait: on the old rates it was 10,000 × 45p + 4,000 × 25p = £5,500. So £1,000 more relief, worth about £260 at basic rate or £420 at higher rate.
A groundworker doing 25,000 miles. Also £1,000 more relief. Once you are past 10,000 miles the benefit is capped, because everything above that is still 25p.
The pattern to notice: the change is worth most to someone doing 10,000 miles or more, and it is worth exactly the same £1,000 whether they do 10,000 or 40,000. If you do very high mileage, the actual-cost basis with capital allowances is often better than the simplified rates and always worth comparing — see the vans, tools and plant guide.
1. Your bookkeeping software. Mileage rates are frequently hard-coded in templates, spreadsheets and expense apps, and 45p has been correct for fifteen years — so it is baked into a lot of them. If nobody has changed it, you are quietly under-claiming by 10p a mile. This is the single most likely place for the change to go unnoticed.
2. What you reimburse employees. If you pay site staff a mileage allowance, 55p is now the approved rate, so you can pay up to 55p for the first 10,000 miles with no tax or NIC consequence. Paying 45p is no longer "the tax-free rate" — it is 10p below it, and the difference is something an employee can claim relief on themselves. If you employ people, telling them the rate has changed is a cheap piece of goodwill. See trades payroll.
For a given vehicle you use either the simplified mileage rates or actual running costs with capital allowances, and you cannot switch back and forth on the same vehicle. The 10p rise shifts the balance a little towards mileage, particularly for a vehicle that is not expensive to run and was bought some years ago and is therefore no longer generating much in the way of allowances.
Against that: a new van bought outright attracts the annual investment allowance at 100% of cost, up to £1,000,000, which is usually decisive in the year of purchase. So the common sensible pattern for a trade with two vehicles is actual costs on the newly bought van and simplified mileage on the older one — which is permitted, because the choice is per vehicle.
The change is being delivered by the Taxation (Energy and Vehicles) Bill, amending ITEPA 2003 section 230(2) and ITTOIA 2005 section 94F(2). gov.uk describes it as having retrospective effect from 6 April 2026 and the published approved mileage table already shows 55p, so HMRC is operating it. The measure page, however, still says legislation "will be included" in the Bill, and we have not confirmed Royal Assent. Plan on 55p — that is what the published rate table says — while knowing the enacting Act is what you would want to cite in a formal dispute.
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55p per mile for the first 10,000 business miles in a car or van, and 25p a mile above 10,000. Motorcycles stay at 24p and bicycles at 20p. The 55p rate applies from 6 April 2026 with retrospective effect and covers both employee approved mileage allowance payments and the self-employed simplified mileage rates, with the NIC relevant motoring expenditure disregard also rising to a flat 55p. This is the first change to the 45p rate since 2011/12, so fifteen years of frozen relief has finally moved. Only the first band changed — everything above 10,000 miles is still 25p.
A maximum of £1,000 of extra deduction per vehicle per year, because only the first 10,000 miles moved and the increase is 10p a mile. On 6,000 business miles the extra relief is £600, worth roughly £156 in income tax and Class 4 NIC at the basic rate. On 14,000 miles it is the full £1,000, worth about £260 at basic rate or £420 at higher rate. Above 10,000 miles the benefit is capped, so someone doing 40,000 miles gains exactly the same £1,000 as someone doing 10,000.
Almost certainly yes, and this is where the change most often goes unnoticed. Mileage rates get hard-coded into spreadsheets, invoice templates and expense apps, and 45p was correct for fifteen years so it is baked into a great many of them. If nobody has changed the figure you are under-claiming by 10p on every business mile. Check the mileage rate in your accounting software, in any expenses app your staff use, and in whatever spreadsheet you keep the log in. If you reimburse employees, 55p is now the approved rate you can pay with no tax or NIC consequence.
You choose one basis per vehicle and cannot switch back and forth on the same vehicle, so it is worth deciding deliberately. The 10p rise shifts things slightly towards simplified mileage, particularly for an older vehicle that is cheap to run and no longer generating much in capital allowances. Against that, a van bought outright attracts the annual investment allowance at 100% of cost up to £1,000,000, which is usually decisive in the year of purchase. A common sensible pattern for a two-van trade is actual costs on the newly bought van and simplified mileage on the older one, which is permitted because the choice is per vehicle.
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