The 15-Year HMRC Mileage Rate Freeze, and Its End in 2026

The 2011 setting

When AMAP was set at 45p / 25p per mile in 2011, average UK petrol was approximately 132p per litre. Vehicle insurance and registration costs were lower. A 45p reimbursement reasonably reflected the cost of operating an average car for 10,000 business miles per year.

AMAP for motorcycles was set at 24p, bicycles at 20p, in the same 2011 announcement. Both rates have also been unchanged since.

What has changed since 2011

Average UK petrol price as of 2026 is approximately 145p per litre. Diesel is approximately 152p per litre. That is roughly 10 percent fuel cost inflation, but with much greater volatility within the period (peaks above 190p in 2022 during the energy shock).

Insurance has risen substantially. The ABI reports average comprehensive insurance up roughly 40 percent over the period. Vehicle list prices have risen substantially with the shift toward larger cars and SUVs.

The combined effect was that 45p per mile covered significantly less of an actual operating cost in 2026 than it did in 2011. That gap is what the 6 April 2026 increase to 55p for the first 10,000 miles was intended to close, at least in part.

Why the rate stayed frozen for so long

AMAP is set by HMRC under powers granted by Parliament. Changing the rate requires HMRC action and was rarely a priority. Multiple Treasury reviews considered raising the rate over the years before one finally did in 2026.

The political incentive to leave the rate frozen was straightforward: raising AMAP costs HM Treasury revenue (more tax-free reimbursement equals less taxable income flowing through PAYE), and the benefit accrues to drivers, mostly in lower-to-middle income brackets, who are not a strong lobby. The result was a 15-year freeze, broken only by the 6 April 2026 rise to 55p.

What UK drivers can do

If your employer reimburses below AMAP, you can claim the difference as tax relief via Form P87 or Self Assessment. See the full UK claim guide.

Self-employed sole traders have the option to use actual expenses instead of AMAP. For high-mileage sole traders, especially with newer or higher-cost vehicles, actual expenses often produces a larger deduction than AMAP. The recordkeeping is heavier (every fuel, insurance, maintenance receipt) but the deduction can be significantly larger.

For employees, the structural option is to negotiate a better mileage policy with your employer. Some employers pay above AMAP (the excess is taxable to the employee but the gross is higher). Others switch to actual-cost reimbursement schemes.

The 2026 increase, and what comes next

In the 2026 spring update HMRC raised the first-tier AMAP rate from 45p to 55p, effective 6 April 2026, with the rate above 10,000 miles unchanged at 25p. Campaigners had proposed indexing to CPI since 2011 (which would put it around 60p / 33p in 2026 terms); the actual rise to 55p was smaller than full inflation-tracking, but it was the first movement in 15 years.

Whether the rate is reviewed again soon or settles into another long hold remains to be seen. For now, plan around 55p per mile for the first 10,000 business miles and 25p after.