Chancellor Rachel Reeves has announced a 10p-per-mile increase in the tax-free mileage rate paid to employees who use their own cars for work – backdated to April.
The rate, known as the approved mileage allowance payment, or AMAP, is the amount employers can reimburse staff tax-free when they use their own vehicle for business travel.
It is designed to cover the full cost of using a personal vehicle for work – fuel, wear and tear, insurance and depreciation.
Until this week, that rate stood at 45p per mile for the first 10,000 business miles in a tax year, dropping to 25p per mile beyond that threshold. It had been frozen since 2011.
For all travel since April 2026, the rate rises to 55p – but the change creates a more complex picture for employers than it might first appear.
