Mileage at 55p a mile, and the expenses rules changing in 2028
The tax-free mileage rate for using your own car or van rises to 55p for the first 10,000 miles, and it is now permanent. More changes to expenses follow in April 2028.
If an employee uses their own car or van for business journeys, the employer can pay mileage up to the approved rate tax-free. If they pay less, the employee can claim tax relief on the difference. The self-employed can use the same rates instead of working out actual running costs.
Announced on 27 October 2026 and confirmed in Budget 2026 as permanent.
Show the data
| First 10,000 miles, before | £0.45 |
|---|---|
| First 10,000 miles, now | £0.55 |
| Above 10,000 miles | £0.35 |
For employees with their own expenses
From 6 April 2028, the government removes the £2,500 threshold above which employees must use Self Assessment to claim tax relief on expenses their employer does not reimburse. More claims can be made through PAYE, but they will need evidence before relief is given.
Travel and subsistence
From April 2028, the benchmark scale rates employers use to pay subsistence on business travel without checking receipts will be updated to reflect current costs, and the overseas rates simplified into tiers.
Worth doing now
- Update your expenses policy and mileage claim form to 55p.
- Keep a log of business journeys: date, purpose, start and end, miles.
- Commuting is not business travel, unless it is to a temporary workplace.
Sources
This insight is general information, not advice for your circumstances. Talk to us before acting on it.