HMRC has increased the approved mileage rate to 55p per mile. Learn how to update your payroll and expense policies to stay compliant with Sterling Payroll Solutions.
Following recent HMRC guidance, the Approved Mileage Allowance Payment (AMAP) rate for cars and vans has been adjusted to 55p per mile for the first 10,000 business miles driven in the tax year. This change, which applies retrospectively from 6 April 2026, represents a notable increase from the previous 45p rate. This update is designed to better reflect the current costs incurred by employees who use their own vehicles for business travel, providing a tax-efficient way for employers to support their workforce.
While the new 55p rate is the maximum tax-free reimbursement threshold, it is important to note that it is not a mandatory minimum. Employers maintain the flexibility to choose their internal reimbursement rates. However, if your current policy is below the new threshold, this update serves as a timely prompt to review your existing arrangements. Businesses should document any decisions regarding their chosen rates clearly to ensure transparency. It is also recommended that you review earlier claims made in the 2026/27 tax year to determine if any adjustments are necessary for your employees.
Keeping your expense policies aligned with the latest HMRC guidance is crucial for maintaining compliance and supporting employee relations. For tailored advice on how to update your payroll systems or to discuss the impact of these changes on your operational budget, our team is ready to assist. You can explore our comprehensive payroll services at sterlingpayrollsolutions.co.uk/services to see how we help businesses in Exeter and beyond manage their statutory requirements effectively. Our team can help you implement these adjustments seamlessly into your pay cycles, reducing the administrative burden on your business.
By ensuring your mileage policies are both compliant and fair, you demonstrate a commitment to supporting your team while managing costs strategically. If you need help refining your payroll processes or have questions about how these rates apply to your specific situation, our experts are here to provide the support you need to stay on track. We aim to make payroll management straightforward so you can dedicate your time to running your business effectively.
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