For the first time in 15 years, HMRC has increased the approved mileage allowance rate. If you run a limited company, work as a freelancer, or operate as a content creator through your own company, this change directly affects how much you can claim — and how much tax you could save.
Here’s everything you need to know.
What Has Actually Changed?
From 6 April 2026, the Approved Mileage Allowance Payment (AMAP) rate for cars and vans has increased from 45p per mile to 55p per mile for the first 10,000 business miles in a tax year. After 10,000 miles, the rate remains at 25p per mile.
This is the first uprating of the mileage allowance in 15 years — since 2011 — making it one of the most significant changes for business owners who use their personal vehicle for work.
Why Does This Mileage Rate Change Matter for Limited Company Owners?
If you’re a director of a limited company and you use your personal car for business journeys — visiting clients, travelling to meetings, buying equipment, or driving to events — your company can reimburse you at the new 55p rate completely tax-free.
That means:
- Your company gets a corporation tax deduction on the reimbursement
- You receive the money free of income tax and National Insurance
- You’re no longer being under-compensated for the real cost of running your vehicle
To put it in real terms: if you drive 8,000 business miles in a tax year, you can now claim £4,400 from your company tax-free, compared to £3,600 under the old rate. That’s an extra £800 back in your pocket — for doing nothing differently.
What About Content Creators Running Their Own Company?
If you’re a content creator — whether you run a YouTube channel, a podcast, a TikTok presence, or a brand — and you’ve set up a limited company, this applies to you too.
Business mileage for creators can include:
- Driving to filming locations or studios
- Travelling to brand partnership meetings
- Attending industry events, conferences, or networking
- Trips to purchase props, equipment, or supplies
Many creators underestimate how much mileage they’re actually doing for business purposes. With the mileage rate now at 55p per mile, it’s worth keeping a proper mileage log if you aren’t already.
What You Need to Do Right Now
This change is backdated to 6 April 2026, so if you’ve been paying yourself or employees at the old 45p rate since the start of the tax year, you can top up those payments now.
Quick action checklist:
- Update your mileage records — ensure you’re logging every business journey (date, destination, purpose, miles)
- Review any reimbursements paid since April 2026 — top up to 55p if you’ve been paying at the old rate
- Check your payroll software — ensure the new rate is reflected in any employee mileage claims
- Speak to your accountant — make sure you’re maximising this alongside your wider tax position
Don’t Leave Money on the Table
The mileage allowance is one of the simplest and most overlooked tax reliefs available to small business owners. Many directors either forget to claim it, claim it inconsistently, or aren’t aware they can claim it at all when using a personal vehicle.
With the mileage rate now at its highest level since 2011, there’s never been a better time to get this right.
How BAA Group Can Help
By working with an experienced accountant directly — rather than a junior member of staff at a large organisation — you get advice that’s timely, relevant, and tailored to your business. At BAA Group, I work remotely and am based in Cranfield, supporting business owners and SMEs across the UK to stay tax-efficient and on top of changes just like this one.
If you think I can help you, please do reach out via the contact page.
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