Compliance
Compliance Made Simple: New Mileage Rates & Employer Obligations for 2026-27
Employers and employees must adapt to changes in Approved Mileage Allowance Payments (MAPs) and related tax/NIC obligations effective 6 April 2026.
By NomadicTax Research Team • 5-8 min read • August 27, 2026
## What has changed in mileage allowances?
From **6 April 2026**, HMRC has increased the **Approved Mileage Allowance Payments (MAPs)** rates for car business travel: **55p per mile** for the first 10,000 miles in a tax year, and **25p per mile** thereafter. For motorcycle and cycle rates remain at 24p and 20p respectively. These new rates also apply for National Insurance purposes for cars. ([gov.uk](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027?utm_source=openai))
## Employer responsibilities and actions to take
- **Review payroll policies immediately:** If your organisation reimburses mileage, ensure reimbursements are at or above the new MAPs, otherwise you may need to calculate relief via Self Assessment.
- **Correct past pay periods if over-payments:** HMRC guidance advises that if you reimbursed above old MAPs and deductions were made (tax or NI), there may be refunds due. You might need to amend payroll for previous months. ([gov.uk](https://www.gov.uk/government/publications/employer-bulletin-august-2026/august-2026-issue-of-the-employer-bulletin?utm_source=openai))
- **Record keeping:** Detailed records of mileage business trips are essential. Route, date, miles. Helps in case of HMRC audit.
## Employee perspective: claiming relief
Employees who do not receive full MAP rates can still claim tax relief via Self Assessment for business travel expenses. For those above the new thresholds or who didn’t adjust payments sooner, check past years when tax/NIC might have been overpaid.
## Why this matters for tax planning
- **Cashflow and employee satisfaction:** Competitive mileage rates reduce employees’ out-of-pocket travel costs.
- **Financial controls:** Employers must budget for increased reimbursement liability.
- **Compliance risk:** Failing to align reimbursement or proper reporting could prompt HMRC examination.
## Example scenario
> *Scenario:* Anna drives 12,000 business miles in her company car during tax year 2026-27. First 10,000 miles reimbursed at 55p = £5,500. Remaining 2,000 miles at 25p = £500. Total reimbursement allowed = **£6,000** without tax/NIC reporting.
If her employer only paid 45p per mile previously for all miles, she may be owed refunds for underpaid tax relief.
## What employers should do now
1. Audit current mileage reimbursement contracts and employee-agreements. 2. Update payroll software and policy documents to reflect 6 April increase. 3. Train finance/payroll staff on differences in NI treatment. 4. Communicate clearly with employees moving abroad about international agreements like UK-India DCC (see article above).