We paid 45p from April. What can we top up?

Up to 10p a mile for the miles in the first 10,000 driven from 6 April 2026. The approved amount covers the whole tax year, so a top-up paid later is tax-free as long as total payments for the year stay within it. Topping up is the employer’s choice, not an obligation. If it doesn’t, the employee can claim Mileage Allowance Relief on the difference.

How does an employee claim Mileage Allowance Relief?

Through HMRC’s online service, or on the Self Assessment return. The claim needs a log with the reason for each journey and its start and end postcodes, and it can go back four tax years. The relief is the shortfall times the employee’s tax rate, not the shortfall itself.

Why do tax and National Insurance give different answers?

For tax, car and van miles above 10,000 are approved at 25p. For National Insurance there is no band: every mile is NIC-free up to 55p. Paying 55p for every mile makes the part above 10,000 taxable, but not liable to NIC.

Mileage allowance calculator (UK)

Work out the tax-free amount for business miles in an employee’s own vehicle, what happens to the rest, and how much the employer can still top up tax-free if it paid 45p after 6 April 2026. The car and van rate rose to 55p for 2026/27, backdated to 6 April.

Rates45p → 55p from 6 Apr 2026
LawTaxation (Energy and Vehicles) Act 2026
SourceHMRC, 17 Jun 2026

Journeys and pay

Tax year

Vehicle

Business miles

Employer pays per mile

In pence (45 or 45p) or pounds (£0.45). Enter 0 if the employer pays nothing: the whole approved amount becomes a relief claim.

Miles already driven this tax year

Passengers

Earlier business miles use up the 10,000-mile band first. Passengers are colleagues carried on the same business journey.

Employee’s income tax rate

Of these, miles paid at 45p since 6 April 2026

Result2026/27 · 55p

First 10,000 miles: 10,000 × 55p£5,500.00

Above 10,000: 2,000 × 25p£500.00

Employer pays (2,400 miles at 45p, the rest at 45p)£5,400.00

Shortfall for Mileage Allowance Relief£600.00

· of which on miles paid at 45p (55p − 45p)£240.00

· Estimated relief at 20%£120.00

NIC-free amount (no 10,000 band)£6,600.00

· Excess liable to Class 1 NIC£0.00

Approved amount, tax-free

£240.00 of the £600.00 gap is on miles paid at 45p. The employer can top up the gap tax-free, as long as its payments for the tax year stay within the approved amount. If it doesn’t, the employee can claim Mileage Allowance Relief on it.

This claim crosses 10,000 miles: 10,000 miles at the first-band rate, the rest at 25p.

Each amount is rounded once. Miles and pence are kept to a tenth.

For information only. Not tax or legal advice; check with your accountant.

Spotted a wrong rate or result?

Method

How it’s calculated

01Business miles in the tax year (6 April to 5 April) are counted together, across every car or van the employee uses. Miles already driven fill the first 10,000 first.
02Cars and vans get 55p a mile for the first 10,000 miles and 25p above. Motorcycles get 24p and bicycles 20p, with no band.
03Whatever the employer pays above the approved amount is taxable. If it pays less, the employee can claim Mileage Allowance Relief on the gap, at their own tax rate.
04National Insurance has no 10,000-mile band: every car or van mile is NIC-free up to 55p. Passenger payments of up to 5p a mile are tax-free.

Approved = min(miles, 10,000 − earlier) × 55p
         + rest × 25p
Paid     = miles paid at 45p × 45p
         + other miles × employer rate
Excess   = Paid − Approved        (taxable)
Top-up   = Approved − Paid        (tax-free headroom)
Relief   = Top-up not paid × tax rate
NIC-free = miles × 55p

Example

12,000 miles paid at 55p: the approved amount is £6,000 (10,000 × 55p + 2,000 × 25p), so £600 is taxable, but no NIC is due because the NIC-free amount is £6,600. At 35p the employer pays £4,200 and the employee can claim relief on £1,800: £360 at 20%.

Rates and sources

Values used

Rate	2025/26	2026/27	Source
Car or van, first 10,000 miles	45p	55p	ITEPA 2003 s230(2) · Taxation (Energy and Vehicles) Act 2026
Car or van, above 10,000 miles	25p	25p	gov.uk, Rates and thresholds for employers 2025 to 2026 · 2026 to 2027
Car or van, National Insurance (every mile)	45p	55p	gov.uk, Rates and thresholds for employers 2025 to 2026 · 2026 to 2027
Motorcycle	24p	24p	gov.uk, Rates and thresholds for employers 2025 to 2026 · 2026 to 2027
Bicycle	20p	20p	gov.uk, Rates and thresholds for employers 2025 to 2026 · 2026 to 2027
Passenger, per passenger per mile	5p	5p	ITEPA 2003 s234 · gov.uk, Expenses and benefits: business travel mileage

Pence per business mile. 55p: Taxation (Energy and Vehicles) Act 2026, Royal Assent 15 July 2026, backdated to 6 April 2026; the other rates are unchanged (gov.uk, Rates and thresholds for employers 2026 to 2027). The 2027/28 rate has not been announced and the tool does not assume one. Not yet checked: how the 10,000-mile band applies to someone with more than one employer (HMRC EIM31240). The relief estimate uses the 20%, 40% and 45% rates; Scottish rates are not included. National Insurance works per pay period; the tool shows it for the miles entered.

Questions

Rates come from HMRC and the Act, dated. When HMRC changes a rate, we update the tool.

55p a mile for the first 10,000 business miles in a car or van, then 25p. It was 45p from 2011, and the rise is backdated to 6 April 2026. Motorcycles stay at 24p and bicycles at 20p.

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