The mileage rate is now 55p, backdated to 6 April 2026

The approved mileage rate for cars and vans rose from 45p to 55p a mile on 6 April 2026, the first change since the 2011/12 tax year. The announcement came on 21 May 2026, six weeks into the tax year, and it applies retrospectively to every business mile driven since 6 April. Anyone who set up a mileage log in April and has not touched the rate since is understating the claim by 10p a mile.

What changed and what did not

The rise applies to the first 10,000 business miles in a car or van in a tax year. Above 10,000 miles the rate stays where it has been, at 25p.

The other approved rates for 2026/27 are 24p a mile for motorcycles, 20p for bicycles, and 5p per passenger per business mile for carrying a colleague on the same trip. The flat rates for working from home are also untouched: £10 a month for 25 to 50 hours, £18 for 51 to 100 hours and £26 for 101 hours or more, excluding phone and internet. If you write up invoices, CPD and appraisal paperwork at the kitchen table, that part of the claim is unchanged.

Two separate rules moved on the same day and by the same amount. The first is the Approved Mileage Allowance Payment, the amount an organisation can reimburse a worker per business mile without it being taxed. The second is the self-employed simplified mileage rate, the flat rate a sole trader claims instead of working out actual running costs. Both went to 55p and 25p, legislated through amendments to section 230(2) of ITEPA 2003 and section 94F(2) and (3) of ITTOIA 2005 in the Taxation (Energy and Vehicles) Bill. That symmetry matters for locums, because the same person can be reimbursed by a trust one week and invoicing as a sole trader the next.

What 8,000 business miles is now worth

Take a community pharmacist covering four branches across a county, driving 8,000 business miles in the year.

At the old rate, 8,000 miles at 45p is a deduction of £3,600. At the new rate, 8,000 miles at 55p is £4,400. The claim is £800 larger for exactly the same driving.

That £800 is a deduction from profit, not a cheque. What it is worth in cash depends on the marginal rate it comes off. A basic rate taxpayer outside Scotland pays 20% income tax and 6% Class 4 National Insurance on profits between £12,570 and £50,270, so £800 of extra deduction is worth about £208. Above £50,270 the combination is 40% and 2%, so the same £800 is worth £336. A Scottish taxpayer in the intermediate band pays 21% plus the same 6% Class 4, which comes to roughly £216.

Run the same arithmetic on your own figure. The uplift is 10p for every business mile up to 10,000, so 3,000 miles is £300 of extra deduction, 6,000 miles is £600.

The 10,000 mile ceiling caps the gain at £1,000

The second band did not move, so the benefit stops at 10,000 miles. A GP locum covering three practices and driving 14,000 business miles in 2026/27 claims 10,000 at 55p and 4,000 at 25p, which is £5,500 plus £1,000, or £6,500. The same journeys in 2025/26 would have produced £4,500 plus £1,000, or £5,500.

The gap is £1,000, and £1,000 is the maximum this change can be worth to any car or van driver in a single tax year, no matter how far they drive. For high-mileage community work that is worth knowing before you rebuild a spreadsheet: the number to check is whether the first 10,000 miles are priced correctly, not whether the total looks bigger.

Which journeys count has not changed

Nothing in the May announcement altered which journeys are business travel. The temporary workplace rules still decide that, including the 24 month test and the 40% of working time test set out in HMRC's Employment Income Manual, and a run of sites that does not materially change the journey is still treated as one workplace. If you want the detail, it is in business mileage versus commuting for locums.

The practical point for 2026/27 is narrower. A higher rate on a journey that was never claimable is still nothing. A higher rate applied to a log that already stands up is worth 10p a mile, and the work of getting the log right is unchanged.

What to correct in a log kept since April

If your records started in April 2026, five things are worth checking this month.

1. Reprice the whole year, not just the miles since May. The rate applies from 6 April 2026, so a journey on 9 April is a 55p journey. Splitting the year at the announcement date is the most common way to get this wrong.
2. Find the hard-coded 45p. It tends to sit in a spreadsheet formula, an accountant's template, an app setting, or an invoice line where you recharge travel to an organisation.
3. Check reimbursements. If a practice, trust or agency paid you 45p a mile between 6 April and 21 May 2026, it was paying below the approved amount that now applies. Ask your accountant how the difference is treated on your return, and ask the payer whether it has updated its own rate since.
4. Leave the other rates alone. The 25p band above 10,000 miles is unchanged, so are the home working flat rates, and the motorcycle, bicycle and passenger figures for 2026/27 are the 24p, 20p and 5p listed above. Rewriting those introduces errors rather than removing them.
5. Do it before your next quarterly update rather than in January, if you are inside Making Tax Digital for Income Tax. A wrong rate in a spreadsheet is one correction. A wrong rate already submitted is a correction plus a resubmission.

If you keep your mileage and receipts in Sessional, the expense log and mileage log are described in the expenses guide.

None of this needs a new habit. It needs the odometer readings you already have, priced at the right number, for a tax year that started five months ago.

Sources

• Travel: mileage and fuel rates and allowances (HMRC via GOV.UK, page updated 21 May 2026)
• Increasing mileage rates: policy paper (HMRC via GOV.UK, announced 21 May 2026)
• Expenses and benefits: business travel mileage, rules for tax (GOV.UK, undated guidance)
• Simplified expenses if you are self-employed: vehicles (GOV.UK, undated guidance showing 2026/27 rates)
• Simplified expenses: working from home (GOV.UK, undated guidance)
• Employment Income Manual EIM32080: travel expenses, the 24 month rule (HMRC, undated manual page)
• Rates and allowances: National Insurance contributions (HMRC via GOV.UK, page updated 6 April 2026)
• Income Tax personal allowance and the basic rate limit from 6 April 2026 to 5 April 2028 (HMRC via GOV.UK, 21 November 2022)
• Scottish Income Tax 2026 to 2027: technical factsheet (Scottish Government, 13 January 2026)