Mileage Allowance Relief: Claiming the Gap Your Employer Leaves

Your employer pays 25p a mile. The approved rate is 45p. You drive 8,000 business miles a year, so you are 20p a mile out of pocket — £1,600 across the year.

That gap has a name: Mileage Allowance Relief. It does not come back as cash, and it is not automatic. This guide covers how the calculation works, which claim route applies, and the records that have to sit behind it.

Two separate things: MAPs and MAR

Mileage Allowance Payments (MAPs) are what your employer pays you per business mile. There is no legal requirement to pay any particular rate — or anything at all.

Approved Mileage Allowance Payments (AMAPs) are the rates HMRC treats as tax-free:

Business miles in the tax year	Cars and vans
First 10,000	45p per mile
Above 10,000	25p per mile

Mileage Allowance Relief (MAR) is what closes the gap when MAPs come in below AMAP. It is tax relief, not reimbursement.

Both directions matter:

• Employer pays below AMAP → you can claim relief on the shortfall
• Employer pays above AMAP → the excess is taxable and is reported through payroll or a P11D

Working the calculation

Lucy drives 12,000 business miles. Her employer reimburses at 30p per mile.

Step 1 — the AMAP entitlement, respecting the threshold:

• First 10,000 miles × 45p = £4,500
• Remaining 2,000 miles × 25p = £500
• Total approved amount: £5,000

Step 2 — what the employer actually paid:

• 12,000 × 30p = £3,600

Step 3 — the shortfall:

• £5,000 − £3,600 = £1,400

Step 4 — what the relief is worth:

£1,400 is the amount deducted from taxable income, not the amount refunded. At the 20% basic rate that is £280; at 40% it is £560.

That last step is the one that surprises people. Relief reduces the income you are taxed on. A claim of £1,400 is not a £1,400 cheque.

Note also that the threshold applies to the approved side of the calculation. Applying 45p to all 12,000 miles would give £5,400 and overstate the claim by £400 — the most frequent arithmetic error in UK mileage claims, and one HMRC’s checks are built to catch.

Your own vehicle or a company car — the rates differ

AMAP and Mileage Allowance Relief apply when you drive your own car, van, motorcycle, or bicycle for business.

Vehicle	First 10,000 business miles	Above 10,000
Cars and vans	45p	25p
Motorcycles	24p	24p
Bicycles	20p	20p

Motorcycle and bicycle rates are flat — the 10,000-mile threshold does not apply to them, which also means there is no cumulative total to watch.

There is a further 5p per mile passenger supplement for each fellow employee you carry on the same business journey. The passenger has to be travelling for business too. It is frequently missed, and on a car-shared route it adds up: two colleagues carried over 4,000 shared business miles is £400 of additional entitlement.

Company cars are a different system entirely. If the vehicle belongs to your employer, AMAP does not apply. Business fuel is handled through HMRC’s advisory fuel rates instead, and there is no Mileage Allowance Relief to claim. Confusing the two is a common source of overstated claims — check which vehicle the miles were driven in before you start the calculation.

When the employer pays above the approved rate

The relief runs one way only. If your employer pays more than AMAP, the excess is not a bonus you keep quietly — it is taxable.

Take 6,000 business miles reimbursed at 60p:

• Approved amount: 6,000 × 45p = £2,700
• Actually paid: 6,000 × 60p = £3,600
• Taxable excess: £900

That £900 is reported through payroll or on a P11D and taxed as earnings. There is nothing to claim; there is something to declare. It is worth checking your payslips or P11D if your employer pays a generous rate, because the reporting obligation sits with them but the tax lands on you.

Which route to use

Already file a Self Assessment return? Put the claim in the employment expenses section. No separate form.

Do not file one? Form P87 is the route for employment expenses. GOV.UK publishes a value threshold above which HMRC asks you to register for Self Assessment instead of using P87, so check the current figure before assuming P87 covers your claim.

Either way, relief is generally available for the current tax year and the four previous ones, provided the records exist for each year you claim.

Since the 2024–25 changes to how HMRC handles employment expense claims, P87 claims increasingly need supporting evidence submitted with the claim rather than only on request. That makes the log the claim, rather than something that backs it up later.

What the records have to show

Per journey: date, from, to, purpose, miles. Plus, for the year:

• Total business miles, so the 10,000-mile threshold is applied at the right point
• What the employer actually paid, per mile and in total — payslips or a remittance summary
• Clean separation of ordinary commuting, which is not business travel and must not sit in the total

The third point is where claims come apart. If an employer reimburses home-to-office travel — some do — that is not business mileage, and including those miles in the AMAP entitlement inflates the claim. Commute and business have to be distinguishable in the record, not just in your memory.

Where claims fail

A total with no journeys behind it. “8,000 business miles” is an assertion. HMRC can ask for the journeys, and a figure that cannot be broken down is the weakest possible position.

No employer payment evidence. The claim is a difference between two numbers. Producing only one of them leaves the calculation unverifiable.

Reconstructed from a diary at year end. It may be broadly accurate, but a contemporaneous log is materially stronger, and a reconstruction that produces suspiciously round numbers invites the question.

The threshold ignored. Applying 45p throughout. It is the single most common error, and it always overstates.

Keeping the evidence without the monthly chore

The claim is only as strong as the log behind it, and the log fails for boring reasons: journeys not recorded, purposes not written down, commute mixed into the total.

MileTrack detects journeys automatically and keeps business, commute, and private as separate types, so ordinary commuting never lands in the AMAP total by accident. Cumulative business mileage is tracked against the 10,000-mile threshold, so the rate change is applied at the right mile rather than reconstructed in January.

Exports carry date, from, to, distance, and purpose in PDF, CSV, or XLSX — the per-journey breakdown a MAR claim rests on, in a format you can attach rather than retype.

Related guides

• What Counts as Business Mileage? HMRC Rules with 8 Examples
• HMRC Mileage Calculator Guide 2026: Split Rates Without Mistakes
• HMRC Mileage Rates 2026: 45p and 25p AMAP Rates Explained

Tax note: educational content only, not tax advice. Claim routes and thresholds change — check the current GOV.UK guidance before submitting.