Mileage Rates Have Changed: Are You Claiming the Right Amount?

HMRC Mileage Rate Changes in 2026

As a business owner, staying informed about changes to mileage rates set by HMRC is crucial for effective financial planning and compliance. Here’s what you need to know about the upcoming changes in 2026.

Overview of HMRC Mileage Rates

The HMRC mileage rates are designed to reimburse employees and self-employed individuals for the costs incurred while using their vehicles for business purposes. These rates are periodically reviewed and adjusted to reflect changes in fuel prices and other related costs.

The new rate starts from 6th April 2026 (yes, you can backdate) from 45p per mile to 55p per mile for the first 10,000 miles per year. The amount above this threshold remains the same at 25p per mile.

Key Changes Expected in 2026

• Increased Rates: Anticipate an increase in the approved mileage rates to accommodate rising fuel prices and vehicle maintenance costs.

• New Categories: Potential introduction of new categories for different types of vehicles, such as electric and hybrid cars, which may have different reimbursement rates.

• Impact on Tax Relief: Changes in mileage rates may also affect the tax relief available for business owners, necessitating adjustments in financial planning.

Implications for Business Owners

Understanding the implications of these changes is vital:

• Budget Adjustments: Businesses may need to revise their budgets to accommodate higher reimbursement costs.

• Policy Updates: Companies should review and update their mileage reimbursement policies to align with the new rates.

• Employee Communication: Clear communication with employees regarding changes in mileage rates is essential to ensure compliance and transparency.

Action Steps for Business Owners

To prepare for the changes in mileage rates, consider the following action steps:

• Stay Informed: Regularly check HMRC updates and resources for the latest information on mileage rates.

• Consult Professionals: Engage with accountants or financial advisors to understand how changes may impact your business.

• Implement Changes Early: Update internal systems and policies ahead of the changes to ensure a smooth transition.

Conclusion

The changes to HMRC mileage rates in 2026 will have significant implications for business owners. By staying informed and proactively adjusting policies and budgets, businesses can navigate these changes effectively.