Mileage Allowance Relief: How to Claim 45p Per Mile

Mileage allowance relief is one of the most under-claimed tax reliefs in the UK. Workers who drive their own car for work often don't realise that if their employer reimburses them less than HMRC's approved rates, they can claim the shortfall back as tax relief.

For some workers, that's a few hundred pounds. For high-mileage drivers in roles like community nursing, trades, sales, and delivery, it can run into thousands per year, claimable across four backdated years plus the current one.

This guide explains the approved rates, who qualifies, exactly how to calculate what you're owed, and how to claim.

What is Mileage Allowance Relief?

Mileage Allowance Relief (MAR) is a tax relief for employed PAYE workers who use their own vehicle for business travel and aren't reimbursed by their employer at HMRC's full approved rates.

Here's how the system works in practice:

• HMRC publishes approved mileage rates. The current rate is 45p per mile for cars and vans for the first 10,000 business miles per year, then 25p per mile thereafter
• Your employer may pay you a Mileage Allowance Payment (MAP) for business travel
• If your employer pays at or above the approved rates, no tax is owed on the reimbursement
• If your employer pays below the approved rates, or doesn't pay at all, you can claim the difference as Mileage Allowance Relief

HMRC's approved mileage rates 2026/27

These rates are designed to cover all the costs of using your vehicle for business: fuel, insurance, road tax, MOT, repairs, depreciation, the lot. You can't claim those costs separately on top of the mileage rate.

What counts as business mileage?

This is where most workers go wrong, in both directions. Some over-claim by including journeys that don't qualify. Others under-claim because they don't realise certain trips count.

Journeys that DO count as business mileage:

• Travelling between different workplaces in the course of your job
• Travelling to a temporary workplace (somewhere you work for less than 24 months)
• Visiting clients, suppliers, or customer sites
• Attending training, conferences, or meetings away from your normal workplace
• Travel between sites if you have no single 'normal' workplace

Journeys that DO NOT count:

• Your normal commute from home to your usual workplace
• Personal trips taken during work hours
• Travel between home and a workplace where you've worked for more than 24 months

The temporary workplace rule is where most under-claiming happens. A worker who travels to a client site for 18 months in a row may genuinely qualify for mileage relief on every single one of those journeys, even though it might feel like a 'normal' commute.

How to calculate your claim

The calculation has three parts.

Step 1: Work out your approved mileage value

Multiply your total business mileage for the tax year by the approved rate. For most workers, this means:

• Total business miles × 45p (for the first 10,000 miles)
• Any business miles above 10,000 × 25p

Step 2: Subtract what your employer paid you

Add up the mileage allowance payments your employer paid you across the tax year (shown on your payslip). Subtract that amount from your approved mileage value. The difference is your eligible Mileage Allowance Relief for that year.

Step 3: Apply your tax rate

Your rebate is your eligible MAR multiplied by your marginal income tax rate.

Worked example:

• A worker drives 8,000 business miles in a year
• Their approved mileage value is 8,000 × 45p = £3,600
• Their employer paid them 25p per mile, so they received 8,000 × 25p = £2,000
• Their eligible MAR is £3,600 − £2,000 = £1,600
• As a basic-rate taxpayer, their rebate is £1,600 × 20% = £320 for that tax year
• Across four backdated years at similar mileage, that's £1,280 of rebate. A higher-rate taxpayer would recover £2,560.

Why mileage produces the biggest rebates

Unlike the uniform allowance (a flat £60 per year) or the working from home allowance (£312 per year), mileage scales directly with the work you do.

A community nurse doing 12,000 business miles per year. A trade contractor visiting six sites a week. A field sales rep covering a regional patch. These workers generate substantial MAR claims because their actual mileage is high and their employer reimbursement is often below the approved rate.

Typical mileage rebate scenarios:

Multiply these annual figures by four years of backdated claims, and the scale becomes clear. A worker driving 10,000 unreimbursed business miles per year, claiming for five years at basic rate, recovers around £4,500 from mileage alone.

Who tends to qualify for large mileage claims?

Healthcare workers

Community nurses, midwives, paramedics, and care workers travelling between patient locations. Often unreimbursed or reimbursed below the approved rate.

Construction and trades

Workers travelling between different sites for a single employer. Each site can qualify as a temporary workplace if you work there for less than 24 months.

Transport and logistics (using own vehicle)

Couriers, delivery drivers using their own vehicles, and HGV workers travelling between depots.

Field sales and service roles

Sales reps with a regional territory, service engineers, mobile technicians.

Field-based roles in any sector

Auditors, inspectors, surveyors, anyone who visits client sites rather than working from a single fixed office.

How to claim mileage allowance relief

Option 1: Claim directly through HMRC

Use HMRC's P87 form for claims of under £2,500 in expenses per year. For higher amounts, you'll need to complete a Self Assessment tax return. You'll need:

• A detailed mileage log for the tax year
• Records of your employer's mileage payments
• Information about your role and the journeys you've claimed for

HMRC may request to see your mileage records. The records should include dates, start and end points, the business purpose, and the total miles travelled. Without solid records, HMRC may disallow the claim.

Option 2: Use a specialist accountancy firm

A specialist firm will work with your records (or help reconstruct them where needed), calculate the exact MAR you're owed across all eligible years, factor in any other allowances you qualify for, and handle the entire submission to HMRC.

For high-mileage workers, the difference between a self-submitted P87 and a specialist claim can be significant. Specialists understand the temporary workplace rules, know how to handle gaps in records, and combine MAR with every other allowance you're entitled to.

SmartRebate connects you with a regulated accountancy firm with a 90% success rate, processing over 1,700 claims a month. No win, no fee. Typical timeline is 3 to 6 weeks from application to payment.

The temporary workplace rule in detail

The temporary workplace rule is the single most important concept in mileage allowance relief, and the most commonly misunderstood.

HMRC defines a temporary workplace as a site where you work for less than 24 continuous months. Journeys to a temporary workplace count as business mileage and qualify for the approved rates.

The opposite is a permanent workplace, where you've worked for 24 months or more. Journeys to a permanent workplace count as commuting and don't qualify.

Examples that often surprise workers:

• A contractor working at the same client site for 18 months is travelling to a temporary workplace. The journey qualifies for mileage relief, even if it feels like a normal daily commute.
• A consultant who rotates between three client sites over a year is travelling to temporary workplaces at all three. Journeys to each site qualify.
• A nurse who travels between several hospitals in the same NHS trust is travelling to multiple workplaces. Once one site becomes the primary workplace, journeys there become commuting.
• A site agent who has been on the same construction project for three years has crossed the 24-month threshold. That site is now a permanent workplace and journeys there don't qualify.

The rule applies prospectively too. If you join a project expecting to be there for 12 months, journeys are business mileage even if the project later extends. If you take on a role knowing it will be 30 months, journeys are commuting from day one.

Company car versus own car: which qualifies?

Mileage allowance relief at the 45p / 25p rates only applies to your own vehicle. If your employer provides a company car, different rules apply.

Company car: Advisory Fuel Rates (AFR)

If you use a company car for business travel and your employer pays you less than the Advisory Fuel Rates published by HMRC, you can claim the difference as tax relief on fuel costs only. The AFRs are typically between 8p and 22p per mile depending on the engine size and fuel type.

Own car used for work

If you use your own car for business travel, the full 45p / 25p approved rates apply, designed to cover all running costs of the vehicle. This is significantly more generous than the AFR for company cars and is where the largest rebates come from.

Records you need to keep

HMRC can ask for evidence of any mileage claim. Without solid records, even a legitimate claim can be reduced or rejected.

Minimum records to keep

• Date of each business journey
• Start and end locations
• Total miles travelled
• Business purpose of the journey
• Vehicle used

These records can be kept manually in a notebook or spreadsheet, or automatically through a mileage tracking app. The HMRC requirement is that the records are accurate and contemporaneous, meaning they were created at the time of the journey rather than reconstructed afterwards.

Common mileage claim mistakes

Treating your commute as business mileage

Your normal commute from home to your usual workplace doesn't qualify. It's the most common reason for rejected claims.

Missing the temporary workplace rule

If you work at a site for less than 24 months, journeys to that site count as business mileage, even if you go there every day. Many workers in trades and consulting under-claim because they don't realise this.

Forgetting to subtract employer payments

You can only claim the difference between the approved rate and what your employer pays. Workers sometimes claim the full 45p per mile when their employer has already paid them 25p per mile, which triggers a rejected claim.

Poor mileage records

HMRC can ask for proof. A mileage log with dates, destinations, and business purpose is essential. Apps make this easier than it used to be.