Mileage Allowance Relief: a plain guide
Mileage Allowance Relief (MAR) is tax relief for employees who use their own car, van, motorcycle or bicycle for work and are paid less than the approved mileage rate, or nothing at all. You claim relief on the difference, and you get it at your own rate of tax.
This is record-keeping information, not tax advice. Check GOV.UK for your own situation.
Who MAR is for
HMRC’s manual says you’re entitled to MAR for a tax year if you use your own vehicle for business travel and your employer’s mileage allowance payments are less than the approved amount for that vehicle (HMRC manual EIM31330). The approved amount is your business miles multiplied by the approved rates. There’s no alternative of claiming your actual costs instead.
| Vehicle | 2026–27 rate per business mile |
|---|---|
| Cars and vans, first 10,000 miles | 55p |
| Cars and vans, after 10,000 miles | 25p |
| Motorcycles | 24p |
| Bicycles | 20p |
- The rate covers owning and running the vehicle, so you can’t claim separately for fuel, electricity, vehicle tax, MOTs or repairs.
- It doesn’t cover ordinary commuting, only business journeys. See business mileage vs commuting.
- You must have paid tax in the year you’re claiming for, and the relief can’t be more than the tax you paid that year (GOV.UK: tax relief for job expenses).
Sole traders don’t claim MAR. If you’re self-employed, you claim vehicle costs as a business expense in your Self Assessment, often using simplified mileage at the same flat rates. See mileage tracking for sole traders.
How to claim
- Keep a mileage log. GOV.UK says you must send HMRC copies of your mileage logs, including the reason for every journey and the postcodes for the start and end of every journey. If you have more than one job, send a log for each (GOV.UK).
- Work out the difference. Add up your business miles for each vehicle type, multiply by the approved rates, then take away anything your employer paid you towards the cost.
- Choose how to claim.
- If you complete a Self Assessment tax return, you must claim through your return (GOV.UK).
- Otherwise, use GOV.UK’s online service, which checks whether you can claim and how.
- By post, you must use form P87. GOV.UK says you can claim by post if the claim is within 4 years from the end of the tax year, your total expenses claim for each tax year is £2,500 or less, and you paid tax that year. If it’s more than £2,500, you need to fill in a Self Assessment tax return (GOV.UK: claim by post with P87).
- How far back? GOV.UK says you can claim for the current tax year and the 4 previous tax years, if you’re eligible.
For a current-year claim, HMRC will usually adjust your tax code. For earlier years, it will either adjust your tax code or give you a refund.
A worked example
Example only, with round numbers. Say an employee drives 6,000 business miles in their own car in the 2026–27 tax year, and their employer pays 30p a mile.
- Approved amount: 6,000 × 55p = £3,300
- Paid by the employer: 6,000 × 30p = £1,800
- Mileage Allowance Relief claim: £3,300 − £1,800 = £1,500
- Tax relief for a basic-rate (20%) taxpayer: 20% × £1,500 = £300
- Tax relief for a higher-rate (40%) taxpayer: 40% × £1,500 = £600
The 20% and 40% rates are the England, Wales and Northern Ireland bands on GOV.UK; bands are different in Scotland. GOV.UK’s own illustration: claim £60 at 20% and you’re entitled to £12. The relief reduces your tax: it isn’t the claim amount paid back to you.
If your employer pays nothing: 12,000 business miles would be 10,000 × 55p (£5,500) plus 2,000 × 25p (£500), so £6,000. That’s over £2,500, so by GOV.UK’s rule you’d claim through a Self Assessment tax return rather than form P87.
Keeping the log
The log is the part people tend to leave until it’s too late. An app like Quidometer records each trip you start, including the start and finish postcodes, and lets you export a CSV or PDF. HMRC also wants the reason for each journey, so make sure that’s in your log before you send it.
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Questions
Who can claim Mileage Allowance Relief?
Employees who use their own car, van, motorcycle or bicycle for business travel and whose employer pays them less than the approved amount, or nothing. Sole traders claim vehicle costs in their Self Assessment instead.
How much is Mileage Allowance Relief worth?
You claim the difference between the approved amount and what your employer paid, and the relief is given at your rate of tax. For example, a £1,500 difference is worth £300 to a basic-rate (20%) taxpayer. It can’t be more than the tax you paid that year.
Can I claim Mileage Allowance Relief on form P87?
By post you must use form P87. GOV.UK says you can claim by post if your total expenses claim for each tax year is £2,500 or less and the claim is within 4 years from the end of that tax year. Over £2,500, you need a Self Assessment tax return. If you already complete Self Assessment, claim through your return.
How far back can I claim?
GOV.UK says you can claim for the current tax year and the 4 previous tax years, if you’re eligible.
Do I need to send my mileage log?
Yes. GOV.UK says you must send HMRC copies of your mileage logs, showing the reason for every journey and the postcodes for the start and end of every journey.
Can I claim fuel as well?
No. The approved rate covers owning and running the vehicle, so you can’t claim separately for fuel, electricity, vehicle tax, MOTs or repairs.