Business mileage for a client: 55p for the first 10,000 miles, 25p after, worked for 14,000 miles

A client drives to customers in their own car and asks the practice what they can claim for the miles. The answer is a flat rate per mile, not the real cost of the car, and the first-tier rate went up in April 2026. This guide works one year of miles so the practice can give a figure.

What the sources say

GOV.UK's page on rules for tax on business travel mileage gives these approved rates for business miles:

The same page says that where an employer pays less than the approved amount, the employee can get tax relief, called Mileage Allowance Relief, on the unused balance. For the self-employed, GOV.UK's simplified expenses page for vehicles lists the same car and goods-vehicle rates (55p, then 25p) and says the flat rates cannot be used for a vehicle on which capital allowances have already been claimed.

The sum: 14,000 business miles

Take a client who drives 14,000 business miles in the 2026 to 2027 tax year in their own car. The first 10,000 miles earn the first-tier rate; the rest earn 25p.

A client with 8,000 miles never reaches the second tier: 8,000 x £0.55 = £4,400, against £3,600 at 45p, a rise of £800.

When an employer pays less

Suppose the client is an employee and the employer pays a flat 30p a mile on all 14,000 miles.

• Paid by the employer: 14,000 x £0.30 = £4,200
• Approved amount: £6,500
• Unused balance: £6,500 - £4,200 = £2,300

The tax relief on £2,300 depends on the client's rate: £2,300 x 20% = £460, or £2,300 x 40% = £920. If the employer paid the full £6,500 there would be nothing to claim, and if it paid more than £6,500 the excess is a taxable payment.

What to check with the client

• Is it an employee or a sole trader? The relief for an employee sits on the unused balance; a sole trader chooses flat rates or actual costs. For a sole trader's other simple choice, see the trading allowance or expenses.
• Is there a mileage log? The sum needs business miles only, so the log is the evidence. A request for it belongs in the records request letter.
• Has the car had capital allowances? If so, the flat rates are not available for it.
• Does the client need the figure early? Mileage feeds the quarterly update for clients moving in, see the Making Tax Digital checklist.

What I did not read

I did not read the GOV.UK page on how an employee makes the Mileage Allowance Relief claim (it did not explain the process), the passenger payment rate, the rules for company cars and fuel benefits, or how the first-tier rate is split when a trip period crosses 6 April. The 20% and 40% figures are simple rate multiplications; I did not work the Scottish bands or the effect on the personal allowance.

Overlyft builds AI staff who join your practice team and take each client's mileage log, total the business miles by tier, compare them with what the employer paid and show the sum for the person preparing the return to approve before it goes in.

This is general information, not legal or financial advice. Check the GOV.UK and HMRC pages for your client's case.