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Mileage allowances

Fuel-only mileage rates

HM Revenue & Customs advisory mileage rates for employee private mileage reimbursement or employer reimbursement of business mileage are:

1 December 2009

The following mileage rates come into force officially on 1 December 2009.

Baseline fuel mileage rates
  Rates per mile
Engine Capacity Petrol Diesel Gas
Up to 1400cc 11p 11p 7p
1401 - 2000cc 14p 11p 8p
Over 2000cc 20p 14p 12p

From 1 July 2009

These mileage rates came into force on 1 July 2009.

Baseline fuel mileage rates
  Rates per mile
Engine Capacity Petrol Diesel Gas
Up to 1400cc 10p 10p 7p
1401 - 2000cc 12p 10p 8p
Over 2000cc 18p 13p 12p

From 1 January 2009

Baseline fuel mileage rates
  Rates per mile
Engine capacity Petrol Diesel Gas
Up to 1400cc 10p 11p 7p
1401 - 2000cc 12p 11p 9p
Over 2000cc 17p 14p 12p

HM Revenue & Customs have announced that rates will now be reviewed biannually and generally any changes will take effect on 1 January and 1 July. This area of our site will be updated around the beginning of June and December about one month before any change takes effect.

For employees using their own transport

The approved maximum tax and national insurance free mileage allowances for employees using their own transport for business are as follows:

Flat rate First 10,000 Miles Miles over 10,000
Car or van 40p 25p
Motorcycle 24p 24p
Bicycle 20p 20p

Will these rates change?

We understand the HMRC have indicated in a response to a Parliamentary enquiry that it is not intended that these rates will change.

Income Tax and NICs are due when allowances exceed these rates. Employees can claim tax relief on any shortfall.

Rates of up to 5p per mile, per passenger, are also tax and NIC free when paid for the carriage of fellow employees in a car or van on the same business trip.

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