Mileage tax relief
Tax relief on business mileage
Summary: If an employer pays less than the approved mileage amount, an employee may claim tax relief on the shortfall. Payment above the approved amount is taxable.
55p
25p
Not a refund
Checked on .
How is mileage tax relief calculated?
- Calculate the approved amount from the business miles and HMRC rate.
- Subtract the mileage payment received from the employer.
- Claim Mileage Allowance Relief on a positive shortfall.
- The tax reduction is the eligible shortfall multiplied by the employee's tax rate, subject to their circumstances.
- An employer payment above the approved amount is taxable and normally reported.
Which records support a claim?
- The date of each qualifying business journey.
- The business mileage for each journey.
- The start and end postcodes.
- The mileage payments received from the employer.
Common questions
- How much tax relief do I receive?
- The eligible shortfall is multiplied by your tax rate. It is not repaid pound for pound.
- What records should I keep?
- Keep the date and mileage of each business journey, including the start and end postcodes.
Related pages
Sources
- HM Revenue and Customs, Tax relief for employees: vehicles you use for work (as of 10 September 2026)
- HM Revenue and Customs, Expenses and benefits: business travel mileage for employees' own vehicles (as of 10 September 2026)
- HM Revenue and Customs, Rates and thresholds for employers 2026 to 2027 (as of 10 September 2026)