The Government has announced an increase in the mileage rates available from 45p to 55p per mile for the first 10,000 business miles. The change was announced on 21 May 2026 and applies from 6 April 2026, meaning it is backdated to the start of the 2026/27 tax year.
This changes applies to employees who use their own car or van for business travel and to self-employed people using simplified mileage expenses. It allows employers to reimburse business travel at the approved rate without tax or National Insurance, and it also increases the amount of tax relief available where a worker is paid less than the approved rate.
The 55p rate applies only to the first 10,000 business miles in the tax year. Any business mileage above that remains at 25p per mile. The rates for motorcycles and bicycles are unchanged at 24p and 20p per mile respectively, and the additional passenger payment remains 5p per mile for each fellow employee carried on a business journey.
Contact Rachel Roberts for more information by emailing rachel.roberts@randall-payne.co.uk or call 01242 776000.