Why HMRC Mileage Rates Have Been Frozen Since 2011

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 is that 45p per mile in 2026 covers significantly less of an actual operating cost than it did in 2011. For high-mileage drivers, the under-reimbursement is real.

Why the rate has not changed

AMAP is set by HMRC under powers granted by Parliament. Changing the rate requires HMRC action and is rarely a priority. Multiple Treasury reviews have considered raising the rate; none have implemented the change.

The political incentive to leave the rate frozen is straightforward: raising AMAP costs HM Treasury revenue (more tax-free reimbursement equals less taxable income flowing through PAYE). The benefit accrues to drivers, mostly in lower-to-middle income brackets, who are not a strong lobby. The result is the 13-year freeze.

What UK drivers can do

If your employer reimburses below AMAP, you can claim the difference as tax relief via <a href="/glossary/form-p87">Form P87</a> or Self Assessment. <a href="/uk/p87-self-assessment-claim">See the full UK claim guide.</a>

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.

When the rate might change

If a future Chancellor adopts the rate as a Budget item, change is possible. The most-discussed proposal is to raise AMAP to track CPI inflation since 2011 (which would put it around 60p / 33p in 2026 terms) or to match the equivalent business-cost benchmark used by HMRC for company cars.

Until that change happens, plan as if the freeze continues.