The example, step by step
You drive your own car for work — not your commute — and log 8,000 business miles in 2026/27. Your employer pays 45p a mile.
- HMRC approved amount: 8,000 × 55p = £4,400.
- What your employer paid: 8,000 × 45p = £3,600.
- Mileage Allowance Relief: £4,400 − £3,600 = £800.
- What it is worth: the relief reduces your taxable income, so you get back £160 at 20% (or £320 at 40%).
Nearby mileages (employer pays 45p)
| Business miles | Approved amount | Paid at 45p | Relief | Tax back at 20% | At 40% |
|---|---|---|---|---|---|
| 2,000 | £1,100 | £900 | £200 | £40 | £80 |
| 5,000 | £2,750 | £2,250 | £500 | £100 | £200 |
| 8,000 | £4,400 | £3,600 | £800 | £160 | £320 |
| 10,000 | £5,500 | £4,500 | £1,000 | £200 | £400 |
| 12,000 | £6,000 | £5,400 | £600 | £120 | £240 |
Above 10,000 miles the approved rate drops to 25p, so the gap shrinks again — at 12,000 miles it is £600.
What if my employer pays something else?
| Employer pays | Relief on 8,000 miles | Tax back at 20% |
|---|---|---|
| 0p | £4,400 | £880 |
| 25p | £2,400 | £480 |
| 35p | £1,600 | £320 |
| 45p | £800 | £160 |
| 50p | £400 | £80 |
| 55p | £0 | £0 |
How to claim
- If your total claim for the year is £2,500 or less, use HMRC’s online claim (or form P87).
- Above £2,500, or if you already file a Self Assessment return, claim it there.
- You can claim for the last four tax years — but remember the rate was 45p before 6 April 2026, so older years usually have no gap at 45p.
- Keep a simple mileage log: date, from, to, purpose, miles.
What counts as business miles?
Trips you make for work: visiting clients, travelling between sites, going to a temporary workplace. Your normal commute from home to your permanent workplace does not count.
Should I ask my employer to pay 55p?
It is worth a friendly question. Some employers simply have not updated their expenses policy since the change was announced on 21 May 2026. If they raise their rate to 55p, you get the money straight away rather than a smaller tax refund later. If they keep 45p, you still get tax relief on the 10p gap, so either way you are better off than doing nothing.
Most people who claim simply type their mileage total and what they were paid into the HMRC online form. HMRC then changes your tax code for the current year or sends a refund for past years.
FAQ
Can I claim tax back if my employer pays 45p a mile?
Yes. From 6 April 2026 HMRC’s approved rate is 55p for the first 10,000 miles. On 8,000 miles you can claim relief on £800, which is £160 back at 20%.
How much is the relief on 10,000 miles at 45p?
£1,000 of relief (10,000 × 10p), worth £200 at 20% or £400 at 40%.
Does my employer have to pay 55p?
No. The 55p rate is the most they can pay tax-free, not a legal minimum. If they pay less, you claim relief on the gap.
Sources: GOV.UK “Travel – mileage and fuel rates and allowances” (55p rate, updated 21 May 2026); ATT news 21 May 2026 (written statement HCWS62, backdated to 6 April 2026); GOV.UK “Advisory fuel rates” (rates from 1 September 2026, updated 21 August 2026); Ross Martin Tax Consultancy. Checked 5 November 2026.