Simple Mileage Allowance Calculator For 2026

What The Mileage Allowance Calculator Works Out

• Tax-free mileage allowance: business miles multiplied by HMRC's approved rates: 45p a mile for the first 10,000 business miles in the tax year and 25p after that for cars and vans, 24p flat for motorcycles and 20p for bicycles. 12,000 car miles supports a GBP 5,000 tax-free payment. The rates are per person per tax year, not per vehicle.
• If your employer pays nothing: you can claim Mileage Allowance Relief on the whole approved amount, worth your marginal tax rate: 20% of it for a basic rate taxpayer, 40% at higher rate. The rates are all-inclusive, covering fuel, insurance, servicing and depreciation, so no receipts are needed beyond a mileage log of date, journey, purpose and miles.
• Per mile summary: the two directions the claim works. Paid less than the approved rate, claim relief on the shortfall via a P87 form or self assessment; paid more, the excess is taxable through payroll.
• Miles entered are (advanced): switch to a typical month and the calculator multiplies by twelve, applying the 10,000-mile threshold to the annual total as HMRC does.
• Employer pays you per mile (advanced): many employers pay a lower rate such as 25p or 30p, or reimburse fuel only. The card shows what you receive tax-free over the year.
• Tax relief you can claim (advanced): the gap between the approved amount and what your employer paid, multiplied by your tax rate. Someone paid 25p on 12,000 miles has a GBP 2,000 shortfall, worth GBP 400 back at basic rate; the form can go back four tax years. If the employer pays above the rate the card flips to show the taxable excess.
• Passenger payments (advanced): an extra 5p per mile per colleague carried on business journeys is tax-free where the employer chooses to pay it. Unlike the mileage shortfall, you cannot claim relief if they do not.
• Allowance vs your real costs (advanced): compares the approved amount with your actual running cost per mile. The 45p rate has been unchanged since 2011, a real-terms cut of roughly a third, so drivers of larger or newer cars are often out of pocket on business miles.
• Per month (advanced): the annual allowance spread over twelve months. Travel between workplaces, to clients and to temporary workplaces (broadly, expected to last under 24 months) counts; ordinary commuting to a permanent workplace never does. The self-employed choose once per vehicle between the mileage method and actual costs.

Source and further reading: GOV.UK (HMRC): mileage rates.