Mileage Tax Relief Calculator: How Your Refund Works

Mileage tax relief is worked out in three steps. Multiply your business miles by HMRC’s approved rate for that tax year, then take away anything your employer paid you for those miles. Multiply the amount left by your rate of income tax, and the result is roughly the relief you get.

The biggest figure in a mileage claim isn’t the refund. Ten thousand business miles in 2026/27 add up to £5,500, yet someone paying 20% whose employer paid nothing gets back £1,100. You receive a share of the gap equal to your tax rate, not the whole sum.

This page covers how mileage tax relief is worked out and how to use the mileage tax relief calculator, for employees who use their own car, van, motorcycle or bicycle for work. Four things change the answer: the tax year the miles fall in, what your employer paid, your tax rate, and how much tax you paid that year. Commuting to your usual workplace doesn’t count, so check the temporary workplace rules if you’re not sure a journey qualifies.

Enter one year into the mileage tax relief calculator

The calculator on this page asks for two things: your business miles and the rate you pay tax at. To get a figure you can use:

1. Enter the business miles for a single tax year, not a total across several years.
2. Choose the rate at which you pay income tax in that year.
3. Read the result as your relief if your employer paid nothing towards those miles.

The calculator doesn’t ask what your employer paid, which tax year the miles belong to, or whether you pay Scottish rates. If any of those apply to you, the three steps below give the figure it can’t.

Mileage tax relief calculator: three steps to your refund

You can check any mileage tax relief calculator result by taking these steps for each tax year separately:

1. Multiply your business miles by the approved rate, using the higher rate for the first 10,000 miles and the lower rate for any miles beyond that.
2. Subtract every mileage payment your employer made for those journeys, which leaves the shortfall.
3. Multiply the shortfall by your rate of income tax to estimate the relief.

For cars and vans in 2026/27, the first 10,000 business miles are approved at 55p each, and every mile after that at 25p. Motorcycles get 24p and bicycles 20p, with one rate whatever the distance. The rate covers the cost of owning and running the vehicle, so fuel, electricity, vehicle tax, MOTs and repairs can’t be claimed on top.

Rates can change from one tax year to the next, and the approved mileage rates page keeps the full table.

Step three is where your tax band matters. In England, Wales and Northern Ireland the main income tax rates for 2026/27 are 20%, 40% and 45%. Scottish taxpayers pay Scotland’s own rates on wages and pensions, which run from 19% to 48% in 2026/27 and are set out on GOV.UK’s Scottish Income Tax page.

One limit sits over every result. Relief only applies if you paid tax in the year of the claim, and it can’t be more than that tax, so a low earner may get back less than a calculator shows.

Backdated years use the rate from that year

You can claim for this tax year and up to four earlier ones. Each of those years uses its own approved rate, and for cars and vans the rate for the first 10,000 miles was 45p in every tax year from 2011/12 to 2025/26.

In 2026/27, that puts 2022/23, 2023/24, 2024/25 and 2025/26 at 45p, with only the current year at 55p. A 55p per mile calculator gets the current year right and overstates every year before it. The GOV.UK guide to vehicles you use for work shows both rates side by side.

Here’s how the difference plays out for someone driving 6,000 business miles a year, paid 25p a mile by their employer and paying tax at 20% throughout:

• For each year from 2022/23 to 2025/26, the approved amount is £2,700, the employer pays £1,500 and the £1,200 shortfall is worth £240 in relief.
• For 2026/27, the approved amount rises to £3,300, the shortfall to £1,800 and the relief to £360.

Across the five years the relief totals £1,320. Pricing every year at 55p would suggest £1,800 of relief, which is £480 more than the claim supports. The window moves on each April, so check which years your claim can still reach.

Mileage tax rebate calculator examples at 20% and 40%

Each example follows the three steps, so a mileage allowance relief calculator given the same inputs should reach the same figures. All of them use 2026/27 rates and assume the whole shortfall is taxed at one rate, that you paid at least that much tax, and that mileage is your only job expense.

10,000 business miles with nothing from your employer

At 55p a mile, 10,000 miles gives an approved amount of £5,500. With no employer payment, all of it is shortfall, worth £1,100 at 20% or £2,200 at 40%.

Your employer pays 25p a mile

The same 10,000 miles brings in £2,500 from the employer, leaving a £3,000 shortfall. That’s worth £600 at 20% and £1,200 at 40%, while a Scottish intermediate-rate taxpayer at 21% would get £630.

Any mileage claim calculator that skips the employer step would overstate this shortfall by the full £2,500.

Driving past 10,000 miles

For 12,000 business miles with nothing paid, the first 10,000 come to £5,500 and the remaining 2,000 at 25p add £500, for £6,000 in total. The relief is £1,200 at 20% and £2,400 at 40%.

If you’re not sure which band applies to you, the income tax rates and bands guide shows where each one starts.

Bigger claims can move you onto Self Assessment

When your job expenses for a tax year come to £2,500 or less, you can claim through HMRC’s online service or by post on form P87. Above £2,500, the claim has to go on a Self Assessment tax return. If you already file a return, the claim goes on it whatever the amount.

The limit is measured against your total job expenses for the year, including anything else you’re claiming for, such as tools or professional fees.

It isn’t measured against the refund, which is why a claim can cross the line while the refund sits well under £2,500. The GOV.UK page on claiming job expenses by post sets out the limit.

The 2026/27 rate rise can move the same driver across that line. With 10,000 business miles, an employer paying 25p and no other job expenses, the shortfall was £2,000 in 2025/26, inside the £2,500 limit. The same driving in 2026/27 leaves £3,000, so that year needs Self Assessment.

With nothing from your employer and no other job expenses, a year’s mileage stays at or under £2,500 up to 4,545 miles at 55p, or up to 5,555 miles at 45p.

When you claim online or by post, HMRC wants copies of your mileage logs showing the reason for each journey and the postcodes where it started and ended, with a separate log for each job. For the current tax year, HMRC will usually change your tax code so less tax comes out of your pay, while earlier years can be settled by a tax code change or a refund.

What an HMRC mileage calculator can’t see

A calculator that asks only for miles and a tax rate misses several situations that change the answer:

• Two jobs with unconnected employers can each carry their own 10,000 miles at the higher rate, while associated employers share a single 10,000-mile limit.
• Carrying a colleague only adds to what you receive when your employer pays a passenger rate, since no relief is available where that payment was under 5p a mile or wasn’t made.
• A flat monthly car allowance that isn’t based on your business miles counts as ordinary pay in HMRC’s manual rather than a mileage payment, while a lump sum aimed at the business share of the car’s standing costs (the fixed costs of keeping it) can count as one.
• Payments above the approved amount are taxable, and you can’t claim relief for the same kind of vehicle in a year where that happens.
• Company car drivers claim the actual cost of fuel or electricity for business trips instead of the mileage rates, less anything the employer repaid.

Self-employed drivers follow separate expenses rules, which fall outside this page. If one of the situations above applies to you, work the figure out by hand with the three steps rather than relying on a single mileage tax relief calculator result.

Before you use the mileage tax relief calculator

Gather three figures for each tax year before you open the mileage tax relief calculator: your business miles, what your employer paid for them, and your rate of income tax. Work out each year on its own, at 45p for any year from 2011/12 to 2025/26 and at each later year’s own rate.

Treat the result as an estimate of relief rather than a promised refund, since it can’t exceed the tax you paid and it assumes a single tax band. A year with more than £2,500 of job expenses goes through Self Assessment.

For how to send the claim, which records to keep and what happens to your tax code afterwards, the mileage tax rebate guide covers each step.

Key Takeaways

• Mileage tax relief is your tax rate applied to the gap between HMRC’s approved amount and what your employer paid, not to the whole mileage figure.
• Each tax year uses its own rate: for cars and vans, 55p for the first 10,000 miles in 2026/27 and 45p from 2011/12 to 2025/26, with 25p after 10,000 miles in both.
• Relief can’t exceed the tax you paid in the year, and there’s none if you paid no tax.
• Job expenses above £2,500 in a tax year mean claiming through Self Assessment, and the limit is measured on total expenses rather than the refund.
• Passenger miles, flat car allowances, second jobs and company cars each change the result in ways a miles-and-tax-rate calculator doesn’t show.