Businesses and employees using vehicles for work are being reminded to review the latest HMRC mileage and fuel allowance rates, which determine how business travel can be reimbursed without creating additional tax liabilities.
HMRC's guidance covers a range of travel-related allowances, including approved mileage rates for employees using their own vehicles, advisory fuel rates for company cars and fuel benefit charges. The rates are designed to simplify the treatment of business travel expenses while ensuring reimbursements remain aligned with operating costs.
One of the most significant recent changes is the increase in the approved mileage allowance rate for cars and vans. From the 2026/27 tax year, the rate for the first 10,000 business miles rose to 55p per mile, marking the first increase in more than a decade. The rate for mileage above 10,000 miles remains at 25p per mile. Motorcycle and bicycle rates remain unchanged at 24p and 20p per mile respectively.
The guidance also outlines advisory fuel rates for company car users. These rates are reviewed regularly and can be used by employers when reimbursing employees for business mileage in company cars or when employees repay fuel costs relating to private journeys. Provided employers do not exceed the published rates, there is generally no additional taxable benefit or Class 1A National Insurance liability.
Alongside mileage rates, HMRC has updated fuel benefit figures for the current tax year. The car fuel benefit multiplier increased to £29,200 for 2026/27, while the van fuel benefit charge rose to £798. These figures are used to calculate taxable benefits where employers provide fuel for private use.
The guidance highlights the importance of maintaining accurate travel records. Employees and businesses claiming mileage allowances should keep details of business journeys, including dates, destinations and mileage travelled, to support any claims and ensure compliance with HMRC requirements.
For businesses, the latest rates provide a useful benchmark when reviewing travel policies and employee reimbursement arrangements. As motoring costs continue to evolve, keeping pace with HMRC's published allowances can help ensure travel expenses are managed efficiently while avoiding unnecessary tax complications
