Employment expenses: using your own car

Using your own car for business travel

One of the most common expenses incurred by an employee is travel for business purposes. This may involve you using your own car or van.

Some employers pay or reimburse mileage expenses when you use your own car or van for business travel – this should be on a tax and National Insurance contribution (NIC) free basis and you do not have to claim relief.

You are entitled to tax relief for travel costs that you are obliged to incur in order to do your job. If your employer does not pay or reimburse these expenses at all, or only partly, you may be able to claim a deduction from your income. You will only be able to claim tax back if you are a taxpayer.

What is business travel?

Business travel includes trips such as travel from your office or place of work to visit your customers using your own car, motorbike, bicycle or van. It can cover travel from home to a ‘temporary workplace’ and also itinerant travel, that is, travel to a number of different workplaces. For example, this may apply if you are an employed service engineer and move from place to place during the day.

You cannot generally claim tax relief for the expense of ordinary commuting – travel between your home and permanent place of work. If your employer pays or reimburses you for the cost of ordinary commuting (or other private travel), this is like having an additional salary paid to you, and your employer must deduct tax and National Insurance contributions from the amount paid to you.

You can read more about which types of journeys you may be able to claim tax relief for on our page employment expenses: travel.

How to get tax relief

If you use your own car or van for business travel, there is the statutory system of tax-free approved mileage allowances available.

The maximum amount per business mile is known as the approved mileage allowance payment (also known as AMAP).

As explained above under the heading Using your own car for business travel, your employer can pay or reimburse you up to these amounts on a tax- and National Insurance contributions-free basis. They also do not affect universal credit awards. If your employer pays less than these amounts, you can claim tax relief for the unused balance of the approved amount (more on this below under the heading If you are paid at a different rate or not at all). 

These rates also apply where an employee uses his or her own electric or hybrid car for business journeys (so not just to petrol or diesel cars and vans).

Approved mileage allowance payment (AMAP) rates

The approved mileage allowance payment (also known as AMAP) rates for 2026/27 are:

If you have more than one job and your employers are not connected with each other, that is, the same people do not control each business, you can have a separate 10,000 mile limit for each job you hold.

If you have more than one job and your employers are connected with each other, you have only one 10,000 mile limit to be divided between all affected jobs.

The mileage rate covers the costs of running and maintaining the vehicle, such as fuel, oil, servicing, repairs, insurance, vehicle excise duty and MOT. The rate also covers depreciation of the vehicle.

If you are undertaking qualifying business travel in a company car, the rates that your employer can reimburse you up to on a tax- and National Insurance-free basis, are different (and depend on the type of fuel). See HMRC’s published advisory fuel rates on GOV.UK for further information.

The table below summarises the maximum rate the employer can reimburse on a tax- and National Insurance-free basis.

If you are paid at a different rate or not at all

If your employer pays you more than the Approved Mileage Allowance Payment rate, this is considered extra wages and you have to pay tax on the excess. The employer should either:

• enter the amount on your P11D (used to detail certain expenses and benefits that you are liable to pay tax on), or
• if your employer payrolls expenses and benefits, add the amount to your pay, and deduct and pay tax over as normal under PAYE.

The employer may also need to deduct Class 1 National Insurance contributions on the excess through the payroll, even if they put the amount on your P11D for tax purposes (see below under the heading Working out the National Insurance contributions position). 

If you are on universal credit, it may affect your award if you are paid more than the Approved Mileage Allowance Payment rate. Where the employer applies the correct payroll/reporting treatment, only the excess amount should flow through to the Department for Work and Pensions (DWP) to be picked up as income for universal credit purposes. This means where an employer reimburses mileage at a rate at, say, 60p per mile then universal credit should ignore 55p a mile but should include the 5p balance, after any tax and National Insurance, as income.

You are paid less than the Approved Mileage Allowance Payment rate

If your employer pays you less than the Approved Mileage Allowance Payment rate, you can get tax relief against your earnings for the difference, assuming you earn enough to pay income tax. If you are on universal credit, you should be able to take a deduction from your income for benefits purposes. 

This relief is called Mileage Allowance Relief (also known as MAR). To make a claim you need to keep a record of your business miles and any mileage allowance payments made to you by your employer. Note that for Mileage Allowance Relief, electric and hybrid cars are treated in the same way as petrol and diesel cars.

Strictly, if you are using a company car, rather than your own car, and your employer does not reimburse you for your business mileage, we understand that you should calculate your mileage costs for a tax relief claim based on the actual cost rather than the advisory fuel rates, as set out on GOV.UK. Therefore, if a tank of petrol costs you £60 and you travel 50% for business on that tank of petrol, you should claim tax relief on £30, rather than the number of business miles you have done at the relevant rate (for example, 12p, 14p, 20p etc).

The table below summarises the maximum you can claim tax relief on. You must adjust your claim to take into account any reimbursements from your employer.

Passengers

If your employer pays you for taking a passenger, up to 5p per mile may be paid to you on a tax- and National Insurance-free basis and anything over an allowance of 5p per mile is taxable and subject to National Insurance contributions. The passenger must also be an employee and the journey must be for business.

Unlike the Approved Mileage Allowance Payment, if your employer pays you less than 5p per mile to carry a passenger, you cannot claim any tax relief on the difference.

Working out the tax position

You need to:

• Work out your business mileage for the tax year,
• Multiply your business miles by the Approved Mileage Allowance Payment (AMAP) rate to give you the total approved payment,
• Add up the mileage allowance reimbursements (if any) you got in the tax year from your employer,
• If you had excess mileage allowance reimbursements from your employer you have to pay tax on the extra, or if they were less than the total approved payment you can claim mileage allowance relief.

You can see how both of these things work in the following examples:

Change in mileage rate for 2026/27

The main mileage rate for cars and vans on the first 10,000 miles in a tax year increased for 2026/27, from 45p a mile to 55p a mile.

Although the increase was announced on 21 May 2026, it applies to the whole of the tax year 2026/27. 

It is up to each employer what, if any, mileage rate they pay.

You may have received reimbursement for mileage prior to the announcement. If your employer does not increase your reimbursement rate and backdate this for amounts claimed prior to the change, you may be able to claim Mileage Allowance Relief for 2026/27 in respect of the difference between the approved rate and the reimbursement you received from your employer.

Working out the National Insurance contributions position

You can check to see if any National Insurance contributions are due, by taking the following steps:

1. Work out your business mileage for the tax year.
2. Multiply your business miles by the Approved Mileage Allowance Payment rate to calculate the total approved payment.  Note: for National Insurance contributions purposes, the ‘approved’ rate of 55p per mile is used for all business mileage, even if this exceeds 10,000 miles in the tax year. This means the amount of excess for tax purposes and the amount for National Insurance contributions purposes may be different.
3. Add up any mileage allowance reimbursements paid to you by your employer in the tax year.
4. If your employer paid more mileage allowance reimbursements to you than your business mileage at the Approved Mileage Allowance Payment rate, you have to pay National Insurance contributions on the difference. Your employer should make an adjustment in the payroll and collect the National Insurance contributions due from your wages.

You can see how this works in the following example:

Having an electric company car and a private car that you use for business

Because of the financial benefits available, employers might offer their entire workforce access to company cars via an electric vehicle salary sacrifice scheme. Guidance on salary sacrifice arrangements can be found on GOV.UK. Although that information is aimed at employers, employees may find it useful too. Employees may be using these company cars for business travel. However, they may also retain their own car and occasionally use that for business travel too.

There is sometimes confusion over what mileage rates the employer should reimburse an employee in these circumstances. There can also be a question over what additional tax relief, if any, an employee might claim from HMRC.

An employer is under no obligation to provide any reimbursement for mileage costs at all. If they have provided the employee with a company car, they may have an expectation that the employee will use it for business travel and they are likely to offer reimbursement at the advisory fuel rates only.

Therefore, if you have a company car, but choose to use your own car for business travel, you might not get much, if anything, from your employer towards your mileage costs. But you can claim tax relief from HMRC up to the maximum allowed under the Approved Mileage Allowance Payment rates. If your employer reimburses you according to the advisory fuel rates, this counts as partial reimbursement under the Approved Mileage Allowance Payment system. So you would have to take the amount reimbursed by your employer into account when working out your tax relief claim.

Record-keeping

For travel in your own car, you should keep a log of business travel to include dates, destination, purpose of trip and how many business miles you travelled – this may involve you setting your mileage counter each journey and keeping a record of the journey (date, time, start and end points, purpose and distance). 

There is no requirement in law for an employer to reimburse an employee’s mileage or other travel expenses, although many do, as a matter of good practice. Whether or not they do so, will depend on what has been agreed between you – for example as set out in your employment contract.

Note also, that some employers may not be able to reimburse you (even if they want to) if you cannot provide any records. As you can see from this HMRC guidance on GOV.UK employers do not have to vouch every single item of expenditure to reimburse expenses on a tax-/National Insurance-free basis, however they do have to have some checking procedures in place. Some employers may feel that they would be exposing themselves to HMRC scrutiny by paying your expenses on a tax-/National Insurance-free basis without having checked your spending.

More information

You can find more information on how to claim tax relief for travel expenses on our page Tax relief for employment expenses.

There is more information about tax relief for business mileage on GOV.UK.

You can find more information about tax relief for business travel and subsistence on GOV.UK.

You may find the A to Z list of expenses and benefits on GOV.UK helpful. Although this is aimed at employers, it will also be useful to employees.

HMRC's Employment Income Manual contains technical details of the Mileage Allowance Relief system.

HMRC’s employer guide (which employees may find useful too) (booklet 480) explains how to tax mileage payments for employees.

Some workers use their own cars for significant business travel and thus incur significant mileage expenses, for example care workers. There may be minimum wage or universal credit interactions. You can read about some specific considerations for such workers on our page on minimum wage, tax and benefits help for care workers.