Mileage payments

The Approved Mileage Allowance Payments (AMAP’s) scheme allows employers to make tax-free mileage payments up to the approved amount where employers use their own cars for business journeys.

For cars and vans, a higher approved rate applies to the first 10,000 business miles in the tax year. It was announced in May 2026 that this rate had increased from 45p to 55p with effect from the start of the 2026/27 tax year.

Employers who has paid mileage payments above the old rate in 2026/27 may have accounted for tax and National Insurance on the excess which may no longer be due as a result of the increase in the rate to 55p per mile. Employers in this situation may need to correct their payroll for 2026/27 so that the overpaid tax and National Insurance can be refunded. Employers should follow the guidance on the Gov.uk website at www.gov.uk/ payroll errors.