Audience: Employees who travel for work
If you use your own car, van, motorcycle, or bicycle for work journeys — and your employer does not fully reimburse you — you may be entitled to claim tax relief on the difference. Mileage tax relief is one of the most widely available employment expenses claims, yet it remains significantly underclaimed, particularly by employees in field-based roles, sales positions, or jobs that require regular travel to different locations.
This guide explains the rules around mileage and travel expense claims for employed workers, including how much you can claim, what journeys qualify, and how to make a claim.
HMRC sets Approved Mileage Allowance Payment (AMAP) rates, which represent the maximum amount per mile that an employer can reimburse you tax-free. For cars and vans, the AMAP rate is 45p per mile for the first 10,000 business miles in a tax year, and 25p per mile thereafter. For motorcycles, the rate is 24p per mile. For bicycles, it is 20p per mile.
If your employer pays you at or below the AMAP rate, neither you nor your employer pays any tax or National Insurance on the mileage payment. If your employer pays you more than the AMAP rate, the excess is treated as a taxable benefit.
Crucially, if your employer pays you less than the AMAP rate — or does not reimburse your mileage at all — you can claim tax relief on the shortfall. This is called Mileage Allowance Relief (MAR).
Mileage Allowance Relief is calculated on the difference between the AMAP rate and the rate your employer actually pays you. For example, if your employer pays you 25p per mile and you do 8,000 business miles in a tax year, your employer pays you £2,000. The AMAP rate for 8,000 miles is £3,600 (8,000 x 45p). The shortfall is £1,600, and you can claim tax relief on this amount.
For a basic rate taxpayer, 20% tax relief on £1,600 gives a refund of £320. For a higher rate taxpayer, it would be £640. These are not insignificant sums, particularly for employees who travel frequently for work.
The same principle applies if your employer does not reimburse you at all — in that case, you can claim relief on the full AMAP rate for all your business miles.
The distinction between business travel and ordinary commuting is critical to mileage tax relief claims. HMRC is clear that your regular commute — travelling from your home to your permanent workplace — does not qualify as a business journey. The cost of commuting is considered a personal expense and is not eligible for tax relief.
Business journeys include travelling from your permanent workplace to a temporary work location such as a client site, visiting another branch of your employer, attending a training course away from your normal workplace, and travelling between two work locations if you have more than one place of work.
Temporary workplaces deserve special mention. If you are required to work at a location for a period of no more than 24 months (and the location is not expected to become your permanent workplace), travel to and from that location qualifies as a business journey — even if it includes travel from your home. This rule benefits many project-based workers, consultants, and those on temporary secondments.
To support a mileage claim, you should keep a mileage log. This should record the date of each journey, the start and end locations, the reason for the journey, and the number of miles travelled. You do not need to record every individual journey in minute detail, but you should have enough evidence to demonstrate that the miles claimed were genuinely for business purposes.
A simple spreadsheet is sufficient for most people. Apps are also available that use your phone's GPS to track journeys automatically, which can save time and ensure your records are accurate. HMRC can request evidence to support a mileage claim, so it is important not to rely on rough estimates.
For PAYE employees, mileage claims for previous tax years are made using form P87 (Tax Relief for Expenses of Employment), which can be submitted online through your Personal Tax Account or by post. You can claim for up to four previous tax years.
For the current tax year, HMRC can adjust your tax code to give you in-year relief — meaning you pay less tax each month rather than waiting for a refund at year end. Contact HMRC directly or use your Personal Tax Account to request this.
If your total employment expenses (including mileage) exceed £2,500 in a year, you will need to complete a self-assessment tax return rather than using form P87. However, for most employees, the P87 route is sufficient.
**Disclaimer: ***This article is for general information purposes only and does not constitute tax advice. Tax rules can change and individual circumstances vary. Always consult a qualified tax adviser or contact HMRC directly for advice specific to your situation.*