From 6 April 2026, the HMRC business mileage rate for cars and vans increases from 45p to 55p per mile for the first 10,000 business miles in the tax year. Anything above 10,000 miles stays at 25p per mile. The change applies to both client mileage claims and any personal mileage you put through your business.
You’ve just finished a long week. Three callouts in Doncaster, a boiler swap in Rotherham, a quick fix-and-fly job up in Barnsley, and a Friday afternoon collection from the merchants because the part you needed wasn’t on the van. You’ve put 380 miles on the clock in five days. That’s not unusual for anyone running a trades business in this country.
Now here’s the thing most trades owners don’t think about: every single one of those miles has a cash value attached to it. And from 6 April 2026, that cash value just went up.
The HMRC business mileage rate for the first 10,000 miles has increased from 45p to 55p per mile. That’s an extra 10p in your pocket for every business mile you drive. Let me explain why this matters more than it might look on paper, and what you need to do right now to make sure you’re claiming it properly.
What Is the New HMRC Mileage Rate for 2026?
From 6 April 2026, the approved mileage allowance payment rate for cars and vans is 55p per mile for the first 10,000 business miles in the tax year. Anything you drive above 10,000 miles stays at the old 25p per mile rate. This applies whether you’re a sole trader, a partnership, or a limited company director claiming mileage from your own business.
For context, the previous 45p rate had been in place since 2011. That’s a decade and a half without an increase, while fuel, insurance, servicing, and tyre costs have all moved in one direction. So the bump to 55p is overdue, and it’s a genuine win for anyone on the road for work.
Here’s a quick comparison so you can see the difference in real numbers:
- 5,000 business miles a year: was £2,250, now £2,750. Extra £500.
- 8,000 business miles a year: was £3,600, now £4,400. Extra £800.
- 10,000 business miles a year: was £4,500, now £5,500. Extra £1,000.
- 15,000 business miles a year: was £5,750, now £6,750. Extra £1,000 (because the rate above 10,000 stays at 25p).
For most trades business owners, that’s a tank of diesel, a service, or a decent night out with the family. Not life-changing, but very much worth claiming properly.
Who Can Claim the New 55p Mileage Rate?
The new rate applies to anyone using their own personal car or van for business journeys. That includes:
- Sole traders using a personal vehicle for work
- Partners in a partnership
- Limited company directors who use their own vehicle and bill mileage back to the company
- Team members who use their own vehicle for business journeys
It does not apply if the vehicle is owned by the business. If you’ve got a company van on the books with fuel paid for by the business, you’re in a different system entirely (advisory fuel rates, benefit in kind, that whole world). If you’re not sure which camp you fall into, that’s a conversation worth having with us.
What Counts as a Business Mile?
This is where a lot of trades owners trip up. A business mile is any journey you make wholly and exclusively for the purposes of your business. So:
- Driving to a customer’s house to do a job: business mile.
- Driving from one job to the next: business mile.
- Driving to the merchants to pick up materials: business mile.
- Driving to your accountant, your bank, or a trade event: business mile.
- Driving from home to the same regular workplace every day: not a business mile (that’s commuting).
- Driving to the supermarket on the way home from a job: not a business mile.
Picture this: you leave home at 7am, drive 12 miles to a job in Sheffield, finish at lunchtime, drive 8 miles to a second job in Chesterfield, then 15 miles home. That’s 35 business miles. Easy. Now imagine on the way home you stop at Tesco for the weekly shop. The Tesco detour doesn’t count, but the rest still does. The rule is simple: if the journey is for the business, it counts.
Do I Need to Amend Journals Already Processed for April and May 2026?
Yes, if you’ve processed any mileage claims at the old 45p rate for journeys dated 6 April 2026 or later, you’ll need to go back and amend them to the new 55p rate. This includes claims already pushed through your bookkeeping software, expense submissions from team members, and director mileage logs.
This sounds like a faff, and honestly, it is a bit of one. But it matters. If you don’t update the rate, you’re under-claiming, which means you’re paying more tax than you need to. For a trades business doing 10,000 business miles a year, that’s £1,000 of allowance left on the table. Multiply that across a few directors and team members and the number adds up fast.
If you’re a TWC client and you’d like our team to handle the amendments for you, just drop us a message. We can run through your journals, pull anything dated from 6 April onwards, and update the rate in one batch.
How Do I Keep Proper Mileage Records?
HMRC doesn’t care that you remember the journey. They care that you can prove it. A mileage log needs to capture:
- Date of the journey
- Start postcode and end postcode (or place name)
- Purpose of the journey (customer name, job reference, or “materials run”, “trade event”, etc.)
- Total miles for that journey
Consider this your insurance policy. If HMRC ever asks to see your records, a tidy mileage log is what stands between you and a tax bill with penalties on top. You can keep records on paper, in a spreadsheet, or in an app like MileIQ, Driversnote, or the mileage tracker built into most modern bookkeeping platforms. The format doesn’t matter. The discipline of doing it does.
Here’s a practical tip we give clients: log the mileage at the end of every day, not at the end of every month. Trying to reconstruct three weeks of jobs from memory is a nightmare, and you’ll almost certainly under-claim because you’ll forget the small trips. Two minutes a day beats two hours at the end of the month.
What About Electric Vans and Hybrid Vehicles?
The 55p rate applies to all cars and vans regardless of fuel type, including electric, plug-in hybrid, and hybrid vehicles. This is one of the quirks of the AMAP system that catches people out. Even though running an electric van costs a fraction of running a diesel, the mileage rate you claim is the same.
In my eyes, this is one of the most underrated tax wins for trades owners who’ve made the switch to electric. Your actual cost per mile might be 6p in electricity, but you’re claiming 55p. The difference is yours to keep, tax-free.
Frequently Asked Questions
Does the new 55p rate apply to motorbikes and bicycles?
No. The 55p rate is for cars and vans only. Motorbikes stay at 24p per mile, and bicycles stay at 20p per mile. These rates have not changed.
Can I claim 55p per mile and also claim fuel receipts?
No. The mileage rate is designed to cover all running costs, including fuel, insurance, servicing, repairs, tyres, and depreciation. If you claim 55p per mile, you can’t also claim those costs separately. It’s one or the other.
What if I drive more than 10,000 business miles in a year?
The first 10,000 miles are claimed at 55p per mile. Every mile after that is claimed at 25p per mile. So 12,000 business miles in a year would work out at £5,500 (the first 10,000) plus £500 (the next 2,000 at 25p), making £6,000 in total.
Can I claim mileage if I use a company-owned vehicle?
No. If the vehicle is owned by your business and the business pays for the fuel, you’re in a different system. You’d be looking at advisory fuel rates, fuel benefit in kind, and potentially private use adjustments. Different rules entirely.
Do team members need to submit mileage claims separately?
Yes. Each team member submitting mileage needs their own log with dates, postcodes, and journey purposes. The 55p rate applies to their claims too, as long as they’re using their own personal vehicle for business journeys.
If you’d like our team to review your mileage processes, amend any journals already processed at the old rate, or set you up with a system that captures every business mile properly, that’s exactly what we do every day. Email info@togetherwecount.co.uk or send me a DM on LinkedIn at https://www.linkedin.com/in/aaron-mcleish-specialist-accountant-3a0ab529/. We’ll talk it through and work out how we can help.
Aaron McLeish, Managing Director