HMRC confirms 55p per mile tax-free allowances for | Tech News

HM Revenue and Customs (HMRC) has confirmed 55p per mile tax free-allowances for personally owned automobiles and vans used for business journey.

In an replace final month, HMRC introduced the new authorised mileage charges for the 2026 to 2027 tax 12 months, with these on account of stay in place till April subsequent 12 months. Approved mileage charges are utilized by employers to reimburse workers for mileage incurred on business journeys. The charges are designed to cowl the prices of operating a vehicle, together with fuel, repairs and servicing, with the quantity per mile various relying on the sort of vehicle and quantity of miles coated per 12 months.

For the 2026/27 tax 12 months, HMRC has confirmed that Approved Mileage Allowance Payments (AMAPs) for business journey have elevated by 10p for personally owned automobiles and vans.

The charges have elevated from 45p to 55p per business mile for the primary 10,000 business miles travelled within the present tax 12 months – the primary change in 15 years. The identical price additionally applies for personally owned electric autos.

The 25p for every business mile over 10,000 within the tax 12 months stays unchanged, having been in place since 2011.

An further 5p per business mile may also be claimed for every fellow worker you keep it up a business journey in your car or van.

Explaining how HMRC AMAPs work, ANNA Money stated: “The HMRC mileage allowance is a tax-free rate set by the UK government to reimburse employees or self-employed individuals for business-related travel.

“Mileage Allowance Payments (MAPs) are the payments that employers make to reimburse employees travelling for work. These can be lump sums, fixed rates per mile or reimbursement for actual expenditure.

“MAPs up to a certain threshold are not taxed, these are known as AMAPs, Approved Mileage Allowance Payments. Payments that exceed these thresholds may be subject to tax.”

As effectively because the elevated mileage charges for automobiles and vans to 55p, HMRC has additionally confirmed a 24p price for journey in motor cycles and a 20p price for bicycles within the 2026/27 tax 12 months. These stay unchanged since 2011.

Commenting on the revised HMRC authorised mileage charges for this tax 12 months, the Association of Taxation Technicians (ATT) stated: “Following the announcement, AMAPs, Mileage Allowance Relief (MAR) and self-employed mileage have now increased from 45p to 55p per business mile for the first 10,000 business miles travelled in the tax year.

“The 25p per mile for any remaining mileage in a tax year (which has been in place since 2001) remains unchanged, as is the 5p per business mile rate for passenger payments and the 24p rate for travel in motor cycles and the 20p rate for bicycles.

“The ATT previously made a budget submission calling for rates to be reviewed, given the increase in the running costs of a vehicle since the main rate for travel in an employee’s car or van last increased in 2011. We therefore welcome the announcement of increased rates for 2026/27, but would like to see the rates reviewed in a more regular basis in future.

“A key element of the change is that the new rates have been backdated to 6 April 2026, so will apply for the whole 2026/27 tax year. The Exchequer Secretary to the Treasury has confirmed via a written statement that HMRC will apply the change informally until the legislation can be updated to introduce the new rates for both Income Tax and National Insurance purposes.”

Listed is the up to date authorised mileage charges for the 2026/27 tax 12 months, as confirmed by HMRC:

Updated Cars and Vans Rates