Mileage claim rates for an employee's own car are two numbers and one threshold: 55p a mile for the first 10,000 business miles in the tax year, 25p a mile for every business mile above that, and the threshold resets on 6 April. The rate is per car owner per year, not per employer, so a driver with two jobs shares the 10,000 miles across both. This page explains why the rate drops, how to work a claim that crosses the line in a single month, what an employer's own rate above or below the approved rate does, and where the electric company car mileage rates worksheet on this site applies the same rates to a private electric car.
Why the rate falls after 10,000 miles
The approved rate stands for the whole cost of running the car, and the fixed costs, insurance, road tax and much of the depreciation, are spread over more miles the further the car goes. HMRC's higher rate for the first 10,000 miles is meant to cover a share of those fixed costs; the lower rate after it is closer to the marginal cost of an extra mile. The same two rates apply whatever the car burns.
Crossing the line mid-year
Suppose a driver reaches 10,000 business miles in February and drives another 1,200 by 5 April. The approved amount is 10,000 miles at 55p plus 1,200 at 25p, and the monthly claim for February is split at the exact mile the threshold was crossed. Employers that pay a flat rate all year to a high-mileage driver overpay after the threshold and create taxable pay; the log has to carry the running total.
The employer's own rate
An employer may pay any rate. Up to the approved amount for the year it is tax free; above it the excess is taxable pay through payroll; below it the driver has mileage allowance relief on the shortfall. A flat rate below 25p leaves the driver a relief claim all year; a flat rate above 55p creates taxable pay from the first mile. The approved rate is the neutral choice for most employers.
Rates for other vehicles
Motorcycles and bicycles have their own single approved rates on the same HMRC page, with no 10,000 mile threshold. Vans use the car rates. A company car uses none of these: it is reimbursed for fuel only at the advisory fuel rate, worked on the company car mileage rates worksheet on this site.
Questions people ask about mileage claim rates
Does the 10,000 mile threshold reset each tax year?
Yes, on 6 April. Business miles from 6 April to 5 April count towards the threshold, and the count starts again on the next 6 April.
Is the rate different for an electric car?
No. The approved mileage rates are the same for a private electric car as for petrol or diesel, because they cover the whole cost of the car rather than the fuel.
Do I have to be paid the approved rate?
No. The employer sets its rate; the approved rate is what can be paid tax free. If you are paid less, you claim relief on the difference from HMRC.