Mileage rates: what you need to know

If you cover a lot of work-related miles, mileage rates matter, a lot. They affect how much money stays in your pocket, how fairly you’re treated, and whether you’re covering costs that really shouldn’t be yours.

Whether you’re an employee, freelancer, or business owner, you deserve to be properly reimbursed for every mile you drive for work. And with the price of fuel rising, that’s a bigger issue than ever.

Do you rely on mileage?

If your job involves travel, there’s a good chance mileage rates directly affect your income. Some of the most common roles include:

• home care worker / care assistant  -  travelling between clients’ homes
• support worker / community worker  - visiting people in their homes
• field sales representative / sales executive - meeting clients and prospects
• delivery driver / courier - including self-employed drivers
• field technician / maintenance engineer - electricians, plumbers, HVAC roles
• community health nurse / district nurse - covering large local areas
• property surveyor / inspector - visiting multiple sites
• service engineer / technician - on-site repairs and maintenance
• district / regional manager - overseeing multiple locations

If this sounds like you, mileage rates aren’t just admin, they could be part of your pay.

What are mileage rates

Mileage rates are designed to make sure you’re not out of pocket when you use your own vehicle for work.

When you drive for business, you’re paying for:

• fuel
• wear and tear
• insurance
• maintenance
• depreciation

The HMRC mileage allowance gives you a tax-free way to claim those costs back.

Current HMRC mileage rates

Here’s what you can claim right now:

• Cars and vans:
• 45p per mile for the first 10,000 miles
• 25p per mile after that
• Motorcycles:
• 24p per mile
• Bicycles:
• 20p per mile
• Passengers and colleagues:
• +5p per mile
• Electric company cars:
• 7p per mile

These are known as approved mileage allowance payments (AMAPs) and they’re tax-free up to these limits.

Rates haven’t changed since 2011

The problem is these rates haven’t changed in years.

In that time, fuel prices, insurance, and maintenance costs have all increased. That means you could be covering more of your work costs than you realise, especially if you’re in a lower-paid, travel-heavy role.

What could change?

There are signs things might improve.

Chancellor Rachel Reeves has recently acknowledged the issue. A ‘workers-first’ review is expected to focus on workers who rely on their cars and risk being left out of pocket.

The government is also continuing to freeze fuel duty until September 2026, which is intended to ease pressure at the pump. But whether mileage rates themselves will increase is still to be seen.

How you can claim

If you’re an employee

If your employer pays you less than the HMRC rate, you can claim tax relief on the difference.

That means if you’re underpaid for mileage, you can still get some of that money back.

If you’re self-employed

You can deduct your mileage from your taxable income.

A simple formula is:

Miles driven x mileage rate = total deductible.

This reduces your tax bill, so keeping track really pays off.

Keep a mileage log

If you want to claim properly, you need records.

Keeping a mileage log helps you:

• claim the correct amount
• avoid missing out on money
• provide proof if HMRC asks

Whether you’re employed or self-employed, this is one of the easiest ways to make sure you’re not losing out.