Mileage Allowance Relief Explained
Mileage Allowance Relief (MAR) is the tax relief employees get when their employer pays them less than the HMRC approved mileage rate. In 2026/27, if your employer pays under 55p per mile, you can claim tax relief on the difference.
How MAR works
The HMRC approved rate for 2026/27 is 55p per mile for the first 10,000 qualifying miles. If your employer pays you less than that, the unpaid portion is treated as an expense you can get tax relief on.
You claim MAR through a P87 form (for claims up to £2,500) or through your Self Assessment (for larger claims or if you already file one).
When there is nothing to claim
If your employer pays you exactly 55p per mile or more, there is no MAR to claim — you have already received the full approved amount. If your employer pays more than 55p, the excess over the approved rate is taxable income.
Worked example
The £1,800 is the amount you get tax relief on. At the basic rate of 20%, that is £360 back in your pocket. Higher-rate (40%) and additional-rate (45%) taxpayers get proportionally more.
Employer pays 25p, employee drives 6,000 business miles
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IRS official rate of $0.76 per mile, applied to every mile of this journey.
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