Approved mileage rates increase to 55p per business mile

Businesses and employees are now operating under the updated approved mileage allowance rates introduced from 6th April 2026, with the main rate for cars and vans increasing from 45p to 55p per business mile for the first 10,000 miles travelled each tax year.

The change applies retrospectively from the start of the 2026/27 tax year and has been introduced in response to continued pressure from rising fuel and transport costs.

First 10,000 business miles (cars & vans)

There have been no announced changes to motorcycle, bicycle or passenger rates at this stage.

Businesses should review their mileage reimbursement and payroll processes to ensure the updated rates are being applied correctly, particularly where claims or payments may have been processed earlier in the tax year. Employers may also need to revisit April and May payroll records to ensure they reflect the revised allowance where necessary.

The updated rates may provide improved tax-efficient relief for employees, contractors and self-employed individuals using their own vehicles for qualifying business journeys.

Seek advice from a tax professional

Unsure how the new mileage rates impact your business or payroll processes?

The team at Verallo is here to help ensure your expense procedures and claims are compliant and up to date. Get in touch with our experts today: info@verallo.com | 0203 912 9933