UK Guide · 2025/26 & 2026/27
Mileage Allowance Relief (MAR): Claim the HMRC Shortfall
If you use your own vehicle for work and your employer pays you less than the HMRC mileage rate, you are owed tax relief on the shortfall. This is called Mileage Allowance Relief — and millions of employees in the UK fail to claim it every year.
Key facts for employees
- ✓The HMRC car rate is 55p/mile from 6 April 2026 (45p/mile before) — if your employer pays less, you can claim the difference
- ✓Mileage Allowance Relief reduces your taxable income — you get back 20% (basic rate) or 40% (higher rate) of the shortfall
- ✓Claim on Self Assessment or via form P87 if you don't file a tax return
- ✓Backdating allowed for up to 4 previous tax years — provided you have mileage records
- ✓You need a mileage log showing date, purpose, start/end locations, and miles for each journey
What is Mileage Allowance Relief?
When an employee uses their own car, van, motorcycle, or bicycle for business travel, their employer can reimburse them tax-free up to the HMRC Approved Mileage Allowance Payment (AMAP) rate. If the employer pays at or above the AMAP rate, no tax is owed and no relief can be claimed.
But if the employer pays less than the AMAP rate — or nothing at all — the employee can claim Mileage Allowance Relief (MAR) on the difference. MAR reduces your taxable income by the amount of the shortfall, meaning you get back a proportion of it through your tax bill.
Who can claim Mileage Allowance Relief?
You can claim MAR if all of the following apply:
- ✓You are employed (not self-employed — sole traders and directors use different rules)
- ✓You use your own personally-owned vehicle for business travel — not a company car
- ✓Your employer reimbursed you at less than the HMRC AMAP rate, or did not reimburse you at all
- ✓The journeys were wholly for business purposes — your regular commute does not count
Self-employed? Sole traders and limited company directors are not employees and therefore cannot claim MAR. Instead, see the sole trader mileage guide or director mileage guide.
HMRC AMAP rates for employees 2026/27
The maximum tax-free reimbursement your employer can pay — and the rate used to calculate MAR — is:
| Vehicle | First 10,000 miles | Above 10,000 miles |
|---|---|---|
| Car or van | 55p* | 25p |
| Motorcycle | 24p | 24p (no threshold) |
| Bicycle | 20p | 20p (no threshold) |
* Car and van rate increased to 55p from 6 April 2026 (2026/27 onwards). Before that date the rate was 45p per mile.
How to calculate your MAR claim
The formula is straightforward:
MAR = (HMRC rate × business miles) − employer payment received
The result is the amount that reduces your taxable income.
Worked example — basic rate taxpayer
- Business miles driven: 8,000 miles
- Employer pays: 20p per mile → £1,600 received
- HMRC AMAP rate (2026/27): 55p per mile → £4,400 maximum
- Shortfall: £4,400 − £1,600 = £2,800
- MAR claim amount: £2,800 (deducted from taxable income)
- Tax back (20% basic rate): £560 returned via tax relief
Worked example — higher rate taxpayer
- Business miles driven: 8,000 miles
- Employer pays: 20p per mile → £1,600 received
- Shortfall: £2,800
- Tax back (40% higher rate): £1,120 returned via tax relief
How to claim Mileage Allowance Relief
Via Self Assessment (if you already file a tax return)
Include your MAR claim in the employment section of your Self Assessment return. Enter your total qualifying business miles and the amount your employer paid. HMRC calculates the relief automatically.
Via form P87 (if you don't file Self Assessment)
Most employees do not file Self Assessment. In that case, claim MAR using HMRC form P87 — either online through your Government Gateway account or by post. You can claim for the current year and up to 4 previous tax years.
Keep your mileage records
Whether you claim via Self Assessment or P87, HMRC may ask to see supporting evidence. You need a mileage log that shows the date, business purpose, start and end locations, and distance for each journey. MileageClaim records all of this automatically and produces a PDF report you can use as evidence.
What mileage records do you need for a MAR claim?
HMRC expects you to have a mileage log that shows, for every qualifying business journey:
The date of the journey
The business purpose (e.g. "Client visit — Acme Ltd, Birmingham")
Start and end locations
The number of miles driven
You do not need fuel receipts when claiming the AMAP flat rate. Keep your mileage records for at least 4 years after the end of the tax year (in line with the P87 backdating window), though HMRC recommends keeping employment records for 6 years if you are also subject to PAYE.
Keep your mileage records automatically
MileageClaim records every journey detail HMRC requires — date, purpose, route, and miles — and generates a ready-to-submit PDF report. Free to use, forever. No spreadsheets, no paper logs.
Start tracking free →Mileage Allowance Relief — FAQs
What is Mileage Allowance Relief (MAR)?
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Mileage Allowance Relief (MAR) is a tax relief that employees can claim when their employer reimburses them for business mileage at a rate lower than the HMRC Approved Mileage Allowance Payment (AMAP) rate. The relief reduces your taxable income by the shortfall amount — so you pay less income tax on the difference.
What is the HMRC mileage rate for employees in 2026/27?
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For 2026/27 (journeys from 6 April 2026), the HMRC AMAP rate for cars and vans is 55p per mile for the first 10,000 business miles, then 25p per mile. If your employer reimburses you at less than 55p per mile, you can claim MAR on the shortfall. For example, if your employer pays 20p per mile, you can claim relief on the remaining 35p per mile.
How do I calculate Mileage Allowance Relief?
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Multiply your total qualifying business miles by the HMRC AMAP rate (55p for cars from 6 April 2026), then subtract what your employer actually paid. The difference is your MAR claim. If you are a basic-rate taxpayer (20%), you receive 20% of the shortfall as tax relief. Higher-rate taxpayers (40%) receive 40% back.
How do I claim Mileage Allowance Relief?
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If you file a Self Assessment tax return, include your MAR claim in the employment section. If you do not normally file Self Assessment, you can claim using form P87 — either online via your Government Gateway account or by post. You can claim for the current tax year and up to 4 previous tax years, provided you have mileage records to support the claim.
How many years can I backdate a MAR claim?
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You can backdate a Mileage Allowance Relief claim for up to 4 previous tax years. For example, in 2026/27 you could also claim for 2025/26, 2024/25, 2023/24, and 2022/23 — provided you have mileage records for those years. Claims older than 4 years cannot be submitted.
Related guides
HMRC Mileage Rates 2026/27 →
Current AMAP rates, rate history, and the 10,000-mile threshold explained.
Sole Trader Mileage Claims →
How self-employed sole traders claim mileage on Self Assessment.
Director Mileage Claims →
How limited company directors reimburse mileage tax-free from their company.
HMRC Mileage FAQ →
26 answers covering rates, who can claim, records, and Self Assessment.