If you use your own car for business travel, there’s some good news. The Approved Mileage Allowance Payment (AMAP) rate for cars and vans has recently increased for the first time since April 2011.
The approved rate for the first 10,000 business miles in a tax year goes up from 45p to 55p per mile. If you go over that mileage, the rate stays at 25p per mile. Rates for motorcycles and bicycles have not changed. This rate only applies if you use a private vehicle, not a company car. Although this change was announced on 21 May 2026, it has been backdated and is effective from 6th April 2026.
What does this mean for you?
If your limited company reimburses you for business mileage, you can now claim up to 55p per mile tax-free for the first 10,000 miles. As a Maslins client using FreeAgent, the rate has already been updated from 1 June 2026, so no changes are needed from this date onwards. However, if you have created a mileage claim dated on or after 6th April 2026 and already re-billed it on an invoice, FreeAgent will not automatically change the value of this claim to 55p per mile.
If you have re-billed mileage claims, you have three choices:
- Leave the transactions as they are.
- Change the value of the cost to maximise tax relief but do not change the value of the invoice.
- Change both the value of the cost and of the invoice.
If you choose option 2 or 3, here’s how to make these changes. Edit a re-billed expense or mileage claim.
If you have any questions about the new mileage rate, just get in touch.
