Month-end is a bad time to discover that half your mileage claims say "client visit", three people have rounded every journey to the nearest ten miles, and someone is still using last year’s rate.
That adds up quickly. Research by the Department for Transport found that 71% of employees who made domestic business trips did so at least monthly.
The rules have changed too. From 6 April 2026, the approved mileage rate for employees using their own cars and vans increased from 45p to 55p for the first 10,000 business miles – the first increase since 2011.
If your mileage process still relies on old rates, spreadsheets and employees remembering journeys after the fact, there’s more to check than the pence-per-mile figure.
Note: This article is for general information only and does not constitute tax or legal advice. Mileage and tax treatment depend on individual circumstances. Always check current HMRC guidance or speak to a qualified adviser where necessary.
Business mileage tracking is the process of recording journeys made for work in an employee's own or company vehicle, including where they travelled, why the journey was for business and how far they drove. Accurate records help businesses calculate reimbursements correctly, apply the relevant tax treatment and provide evidence if HMRC checks a claim.
For employees using their own vehicle, the approved mileage allowance payment rates for 2026/27 are:
Vehicle | First 10,000 business miles | Miles above 10,000 |
|---|---|---|
Car or van | 55p per mile | 25p per mile |
Motorcycle | 24p per mile | 24p per mile |
Bicycle | 20p per mile | 20p per mile |
Passenger payment in a car or van | 5p per passenger, per business mile | 5p |
The rates set the approved amount for tax purposes. Employers remain free to reimburse employees at a different rate, although paying above or below the approved amount can have tax consequences.
From 6 April 2026, HMRC increased the approved mileage rate for employees using their own cars and vans from 45p to 55p for the first 10,000 business miles. The rate above 10,000 miles remains 25p, while the motorcycle, bicycle and passenger rates are unchanged.
For finance teams, that means any mileage policy, spreadsheet or expense system still applying 45p to qualifying journeys from 6 April onwards needs reviewing.
The increase adds 10p to each of the first 10,000 qualifying business miles. Because approved mileage payments can be made without Income Tax up to HMRC's approved amount, that raises the maximum approved reimbursement over those miles by £1,000 per employee.
For someone driving 8,000 qualifying business miles:
8,000 × 55p = £4,400
Under the previous 45p rate, the approved amount would have been £3,600.
Difference: £800
At 14,000 business miles, using HMRC's 2026/27 approved rates, the calculation is:
10,000 × 55p = £5,500
4,000 × 25p = £1,000
Total = £6,500
The 55p rate is not a mandatory reimbursement rate. HMRC's rules determine the tax treatment of mileage payments rather than setting what every employer has to pay.
The new rate applies from 6 April 2026, so the change affects more than new claims.
If you've reimbursed qualifying mileage at 45p since then, review:
claims dated from 6 April 2026 onwards
the rate set in your expense system
your mileage policy
any related payroll treatment
In its August 2026 Employer Bulletin, HMRC said employers paying at or below the approved rate may want to increase their reimbursement in line with the new rate.
It also noted that employers who had already deducted Income Tax or National Insurance because payments exceeded the old rates may need to correct earlier payroll calculations.
Paying less than 55p does not automatically mean the employee receives the missing amount from HMRC.
Where an employer pays less than the approved amount, an eligible employee using their own vehicle for business travel can claim Mileage Allowance Relief on the shortfall. That gives tax relief on the difference between the approved amount and what the employer paid.
Not every journey made during the working day counts as business mileage.
The main question is simple: is the employee travelling to a temporary workplace, or just commuting to their normal place of work?
Travel to a temporary workplace can qualify as business travel.
Travel between home and a permanent workplace is ordinary commuting and normally does not.
A temporary workplace is somewhere an employee attends for a limited period or for a temporary purpose.
A temporary workplace can become permanent.
Under HMRC's 24-month rule, this happens where an employee spends, or is expected to spend, at least 40% of their working time there for more than 24 months.
So if someone is assigned to the same site for more than two years, travel to that site may stop qualifying as business mileage.
The expected duration matters too. If a posting is expected to last more than 24 months from the start, HMRC can treat it as a permanent workplace from day one.
For finance: Longer projects and secondments need more than a mileage check. You also need to know how long the employee is expected to work at that location.
"Client visit" does not automatically make a journey business mileage.
If the journey is substantially the same as the employee's normal commute, HMRC can still treat it as ordinary commuting.
For example, if the client site is close to the employee's usual office and the route is much the same, the journey may not qualify.
A trip in a different direction, or significantly further away, is more likely to be treated differently.
For finance: Ask for enough detail to understand the journey. “Meeting” is not useful. A clear start point, destination and business reason is.
Working from home part of the week does not automatically turn the journey to the office into business mileage.
In HMRC's hybrid-working guidance, the office can still be a permanent workplace even where an employee regularly works from home.
So starting the day at home, answering emails and then driving to the office does not, by itself, make that journey a business trip.
If an employee uses their own car or van for a qualifying business journey and carries another employee travelling for work, the employer can pay an additional 5p per passenger, per business mile.
One detail is easy to miss: if the employer does not pay that passenger amount, the employee cannot claim Mileage Allowance Relief for the missing 5p.
Mileage problems usually start with how journeys are recorded, not how the final total is calculated.
HMRC's own guidance shows what can trigger questions: estimated mileage, round figures and claims that appear to include ordinary commuting.
"About 50 miles" may be quick to enter, but it leaves little evidence behind the claim.
HMRC tells its PAYE reviewers to ask for supporting records where total mileage appears to be estimated, including claims based on round or arbitrary figures. If the records themselves appear estimated, reviewers can ask for details of the journeys actually made.
What to watch for: Repeated round numbers, identical weekly mileage, or distances that change for the same regular journey.
The longer someone leaves a claim, the more they have to reconstruct: where they went, which route they took and why the journey was for work.
For self-employed mileage claims, HMRC says a contemporaneous record of business mileage is important to support a claim.
For finance teams, the practical aim is to get the journey recorded while the details are still clear rather than rebuilding it at month-end.
"Meeting", "client", and "site visit" tell an approver very little.
When an employee claims mileage-related tax relief, HMRC requires mileage logs to include the reason for every journey and the start and end postcodes.
A useful description should make the business purpose clear enough that someone reviewing the claim later can understand why the journey was made.
Home-to-work travel can easily creep into claims if employees are unclear about the difference between a business journey and their normal commute.
HMRC's travel rules exclude ordinary commuting from qualifying business travel, while travel to a genuine temporary workplace can qualify.
That makes the start point, destination and reason for travel important checks, not just extra fields on an expense form.
Mileage can be accurately recorded and still be reimbursed incorrectly.
For 2026/27, HMRC's approved rate for cars and vans is 55p for the first 10,000 business miles and 25p after that.
That means finance needs visibility of cumulative mileage as well as each journey. A spreadsheet still applying 45p, or applying 55p after an employee passes 10,000 miles, will produce the wrong approved amount.
Could someone in finance pick up the claim months later and see:
where the employee travelled
why the journey was for work
how the mileage was calculated
why the journey qualified
which rate was applied
Employers still need to keep records of mileage payments and the business journeys they relate to.
If the record answers those questions without going back to the employee for an explanation, finance is in a much better position if the claim is reviewed later.
A mileage claim should make it clear where the employee went, why the journey was for work and how the mileage was calculated.
That matters because HMRC can ask to see the records behind travel expenses, particularly where mileage looks estimated or may include ordinary commuting.
For employees claiming vehicle-related tax relief, HMRC says mileage logs must include the reason for every journey and the start and end postcodes. Employees also need to keep records of the dates and mileage of their work journeys.
A useful mileage record should therefore capture:
date of travel
start postcode
destination postcode
business reason for the journey
business miles travelled
the vehicle or mileage rate used, where relevant
The business reason needs to be specific enough to explain why the journey qualified.
London → Cambridge – "Meeting" – 80 miles
SW1A 1AA → CB2 1TN – "Quarterly review with ABC Ltd" – 63.4 miles
For employers, the record needs to support the expense payment too. HMRC says businesses should keep the date and details of employee expenses and, for reimbursed travel, a record of when and why the employee travelled.
The answer depends on whose records you're looking at.
Who? | HMRC record-keeping period |
|---|---|
Employees | HMRC says travel-expense records should be kept for at least 22 months after the end of the relevant tax year. |
Employers | Records of employee expenses and benefits must generally be kept for three years from the end of the tax year they relate to. |
Self-employed people | Business records must generally be kept for at least five years after the 31 January submission deadline for the relevant tax year. |
Limited companies | Company accounting records must generally be kept for six years from the end of the financial year they relate to, and longer in some circumstances. |
HMRC's PAYE guidance tells reviewers to look more closely where mileage appears to be estimated, looks unusually high for the employee's role or may simply represent travel between home and work.
It specifically gives round or arbitrary figures (such as claiming the same mileage every week) as a reason to ask for the records behind the claim. Where those records also appear estimated, HMRC can ask for details of the journeys actually made.
HMRC does not prescribe a particular mileage-tracking tool. Its guidance focuses on the record itself: employees making a mileage-related tax relief claim need to keep the dates and mileage of work journeys, with mileage logs showing the reason for each journey and its start and end postcodes.
That means a paper logbook, spreadsheet, or mileage app can all work. The difference is how much checking and calculation they leave to the employee and finance team.
For a small number of journeys, a spreadsheet or paper log can be enough.
At minimum, it should capture:
journey date
start and end locations
business purpose
business miles travelled
the mileage rate applied
Those details reflect the journey information HMRC expects employees to retain when supporting mileage claims.
The admin increases as mileage volume grows. With a spreadsheet, someone still needs to enter the journey, check the distance, decide whether it qualifies as business travel and apply the correct rate.
That last step now needs particular attention. HMRC's 2026/27 rates are 55p for the first 10,000 business miles in an employee's own car or van and 25p thereafter, so finance also needs to keep track of each employee's cumulative mileage.
A spreadsheet can hold all of that information. It just relies on the process around it being followed consistently.
A business mileage tracker app can take some of that manual work out of the claim.
For finance teams, the useful features are the ones that help produce a complete, consistent record, such as:
calculating journey distances consistently
capturing the start, destination and business purpose
applying mileage rates and thresholds correctly
tracking cumulative mileage
flagging claims that fall outside policy
keeping the claim and approval history together
producing records finance can retrieve later
Automatic GPS tracking can make journey capture easier, but it does not decide whether a trip qualifies for tax purposes. HMRC distinguishes between business travel and ordinary commuting, and its mileage-log requirements still include the reason for the journey as well as the start and end postcodes.
So if you're comparing business mileage tracker apps, look beyond how they record the miles. Check how they handle the information finance needs to approve, reimburse, and retain the claim.
Triathlon Ireland had been using Excel and a manual approval process before moving its expenses and mileage to ExpenseIn.
A spreadsheet may still contain the right data, but if finance is spending time checking distances, updating rates, tracking annual mileage, and chasing approvals around it, the manual work has moved outside the spreadsheet rather than disappeared.
A good mileage process should make it easy for employees to record a journey and easy for finance to check it.
For most finance teams, that means:
Consistent distance calculation. Employees shouldn't be estimating mileage from memory. ExpenseIn's mileage recording software uses Google Maps to calculate journey distances from the starting point and destination entered.
The right mileage rates. Your process needs to account for different rates and mileage bands.
Cumulative mileage tracking. Because the approved rate changes after 10,000 miles, finance needs visibility of an employee's total mileage across the tax year. ExpenseIn's mileage recording tools include cumulative mileage tracking and reporting.
Clear journey details. The claim should show where the employee travelled and why. That gives approvers enough information to check the journey without chasing for an explanation later.
Policy checks. ExpenseIn's automated expense policies can check claims against rules set by the business, helping flag exceptions during the submission and approval process.
Mileage records in one place. Finance should be able to find the mileage claim, journey details and supporting information without piecing the history together from spreadsheets and emails.
For some organisations, mileage also brings wider compliance and reporting requirements.
ExpenseIn's mileage recording software, for example, includes Duty of Care functionality that can be used to collect documents such as:
driving licences
MOT certificates
vehicle tax details
business insurance
For businesses measuring travel emissions, ExpenseIn also provides carbon reporting for mileage and other relevant expense categories.
The aim isn't to add more checks for finance. It's to capture the information needed to review the claim as part of the mileage process, rather than chase it afterwards.
Mileage doesn't need its own spreadsheet, approval trail, and reporting process. With ExpenseIn's mileage recording software, it sits alongside the rest of your employee expenses.
In practice:
Employees record the journey as an expense. Personal and company-car mileage can be logged in ExpenseIn, so employees aren't submitting a separate mileage sheet alongside their other claims.
Managers review mileage through the normal approval process. ExpenseIn's advanced approvals let approvers review expense details and see any policy issues before approving or rejecting a claim.
Finance keeps the mileage history in the same system. The mileage dashboard and reporting tools give finance visibility of cumulative mileage and mileage expenses without maintaining a separate record outside the expense process.
What customers have seen in practiceVent-Axia: After moving away from a paper-heavy process, its Head of Finance & Accounting said:
“The mileage log for company car users is most beneficial for our employees, this saves them time and also prevents any tax implications.”
– Vent-Axia customer story
Triathlon Ireland: After replacing Excel and manual approvals, the team said ExpenseIn had:
“saved huge amounts of time in reviewing and approving mileage and expense claims.”
– Triathlon Ireland customer story
It also reported that cumulative mileage was easier to track.
The common benefit: less manual mileage admin and clearer information for finance.
The 55p rate only applies in the right circumstances. Company cars, electric vehicles, and VAT each have their own treatment.
Company cars: use the right fuel rateThe 55p AMAP rate applies when an employee uses their own car or van for business mileage. For a company car, HMRC uses Advisory Fuel Rates (AFRs) when reimbursing employees for business fuel.
AFRs vary by fuel type and engine size, and HMRC reviews them four times a year: on 1 March, 1 June, 1 September, and 1 December.
That matters if your mileage rates live in a spreadsheet. A rate entered at the start of the year may be out of date a few months later.
It also matters for employees who use more than one vehicle:
Own car for business: use the relevant AMAP rate.
Company car: use the relevant AFR when reimbursing business fuel.
Finance therefore needs to know which vehicle each claim relates to before applying a rate.
There isn't one mileage rate for every electric vehicle.
Vehicle | Rate to check |
|---|---|
Employee's own electric car | |
Fully electric company car |
From 1 September 2026, the advisory rates for fully electric company cars are:
7p per mile for home charging
15p per mile for public charging
Where a company car is charged both at home and publicly, HMRC allows the mileage to be split between the two rates on a fair and reasonable basis. A higher rate can also be used where the actual cost per mile can be evidenced.
The first question for an EV mileage claim is therefore: is it the employee's car or the company's?
Mileage VAT works differently again.
Where an employee is paid a mileage allowance, HMRC says input VAT is calculated using the fuel element of that allowance, not the full 55p AMAP rate.
HMRC also requires the allowance to be based on mileage actually travelled and requires supporting fuel invoices where employees buy the fuel on the employer's behalf.
Take an employee who drives 8,000 business miles in their own 1,401cc–2,000cc petrol car.
From 1 September 2026, the relevant HMRC fuel rate is 17p per mile:
8,000 miles × 17p = £1,360 fuel element
At the standard 20% VAT rate, the VAT fraction is 1/6:
£1,360 ÷ 6 = £226.67 input VAT
So the calculation is based on the £1,360 fuel element, not the full £4,400 mileage reimbursement.
ExpenseIn's mileage tracking software can calculate VAT on mileage expenses in line with HMRC guidance, so finance doesn't have to calculate the fuel element claim by claim.
VAT recovery depends on your circumstances and the normal input-tax rules, so check the current HMRC guidance or speak to a tax adviser before making a claim.
For employees using their own vehicle, qualifying business travel can fall within HMRC's Approved Mileage Allowance Payments framework. Employers can reimburse up to the approved amount tax-free, subject to the rules.
Eligible self-employed people can alternatively use HMRC's simplified mileage rates rather than actual vehicle running costs, subject to the eligibility and consistency rules for that method.
Normally, no.
Travel between home and a permanent workplace is ordinary commuting, even where the journey happens outside normal working hours.
Travel to a genuine temporary workplace may qualify, but HMRC also has rules preventing journeys that are substantially the same as an ordinary commute from being converted into deductible business travel.
Employers are not required by the AMAP rules to reimburse at 55p.
Where an eligible employee uses their own vehicle for qualifying business travel and receives less than the approved amount, they may be able to claim Mileage Allowance Relief on the difference. The resulting benefit is tax relief on that shortfall, based on the employee's tax position.
Yes. A business mileage tracker app can be used to record mileage provided the resulting records contain the information you need to support the claim.
ExpenseIn's mobile app allows users to enter mileage expenses, journey dates, descriptions and locations, with Google Maps used to calculate the suggested journey distance.
It depends on who you are and why the records are being kept.
Employees should generally keep relevant travel-expense records for at least 22 months after the tax year. Employer expense-and-benefit records are generally retained for three years after the relevant tax year. Self-employed taxpayers normally keep business records for five years after the 31 January filing deadline, while company tax records are generally retained for six years.
Check current HMRC guidance for the rules applying to your particular circumstances.
Mileage shouldn't require detective work at month-end.
The basic formula is straightforward: capture the journey properly, establish whether it qualifies, calculate the distance consistently, apply the right rate and retain enough evidence to show how the reimbursement was reached.
It's the manual gaps between those steps that create the work.
ExpenseIn brings mileage recording, policy checks, approvals and reporting into the wider expense process, with Google Maps mileage calculation and cumulative mileage reporting built in.
Book a demo to see how ExpenseIn can help your finance team spend less time checking mileage and more time reviewing the exceptions that actually need attention
Struggling with HMRC mileage rates? Our 2025 guide simplifies the process, helping you calculate business travel expenses, ensure compliance, and reimburse employees without the headache.
