Employer Pays Less Than the HMRC Mileage Rate – What Can I Claim?
If your employer pays you less than the HMRC approved rate (55p per mile up to 10,000 miles in 2026/27), you can claim tax relief on the difference. This is Mileage Allowance Relief, and it can be worth hundreds of pounds a year.
The gap you can claim
The claimable amount is the difference between the HMRC rate and what your employer pays, multiplied by your qualifying business miles. You then get tax relief on that amount at your highest rate of income tax.
Worked examples
A care worker driving 5,000 business miles a year and paid 35p by their employer is owed £200 in tax relief.
Care worker paid 35p per mile
How to claim
Use form P87 on GOV.UK for claims up to £2,500, or claim through your Self Assessment for larger amounts. You will need a mileage log showing the date, reason and start/end postcodes of each journey.
Calculate your mileage
Start postcode → add stops → destination → calculate. Free, no sign-up.
Quick Mileage Calculator
Enter two locations to instantly calculate your driving distance and mileage allowance. Free — no sign-up required.
IRS official rate of $0.76 per mile, applied to every mile of this journey.
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