In a welcome change for business owners, employees and the self-employed, the Government has increased the approved business mileage rates for cars and vans from 45p to 55p per mile for the first 10,000 business miles travelled each tax year.
The change is backdated to 6 April 2026, meaning it applies for the whole of the 2026/27 tax year. Companies, and self-employed individuals using HMRC’s simplified mileage method will gain an additional £1000 of tax-free mileage allowance compared with the previous rate assuming 10,000 business miles are covered per year.
The approved business mileage rates for mileage over 10,000 miles in a tax year remain at 25p per mile.
| Vehicle | Previous Rate | New Rate |
|---|---|---|
| Cars & Vans (first 10,000 miles) | 45p | 55p |
| Cars & Vans (over 10,000 miles) | 25p | 25p |
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