Finally, a bit more cash in your pocket… thanks to the new 55p mileage rate

Finally, a bit more cash in your pocket… thanks to the new 55p mileage rate

Good news for anyone using their own car or van for business journeys: HMRC has increased the approved mileage rate from 45p to 55p per mile.

Yes, you read that correctly. HMRC has actually increased something helpful.

The new rate applies from 6 April 2026 and covers the first 10,000 business miles in the tax year. After that, the rate remains at 25p per mile.

So, while it might not mean you can retire to the Bahamas just yet, it does mean a little more money back for business travel.

What has changed?

From the new tax year, you can claim:

55p per mile for the first 10,000 business miles
25p per mile for any business miles after that

The old rate was 45p per mile, so this is a welcome increase, especially considering fuel, insurance, repairs, and general car costs have all been doing their best impression of a rocket launch.

When will you feel the benefit?

This change started on 6th April 2026, so employers and employees may see the benefit from April 2026 if mileage is paid through expenses, while self-employed people or those claiming through a tax return will usually see it from April 2027 onwards, or as late as January 2028 if they file near the deadline.

In classic tax fashion, the good news starts in 2026, but your wallet may not properly notice until 2027.

Still, we will take the win. HMRC giving drivers an extra 10p per mile is not quite a lottery win, but these days we are not turning down loose change from anyone.