UK Mileage Allowance and Subsistence: HMRC Rates & Evidence Guide 2026

Getting your travel costs right is one of the easiest ways to save money on taxes, but it’s also where most businesses get tripped up. If you’re claiming mileage or meal allowances for your team, you need to know exactly what HMRC considers a fair rate and what proof they’ll ask for if they knock on your door. Get it wrong, and you’re looking at back taxes, interest, and potential penalties.

This guide breaks down the current rules for the 2025/2026 tax year. We’ll look at the specific pence-per-mile rates for cars and vans, how to handle fuel-only claims, and the tricky bit: subsistence (food and accommodation) when staff are away from home. Whether you’re an employer setting up a policy or an employee preparing a claim, this covers the evidence requirements that keep you safe.

The Core Mileage Rates You Need to Know

HMRC doesn’t pay you directly; these are "approved expense" rates. If you reimburse your employees at these levels, they don’t have to declare it as income, and you can deduct the cost in your own accounts. It’s a win-win, provided you stick to the numbers.

The rates change occasionally, usually around April, so always check the latest announcement. For the 2025/2026 period, the standard rates remain consistent with recent years, but it’s crucial to distinguish between vehicle types.

Notice the drop-off for cars after 10,000 miles. This reflects the idea that wear and tear decreases as the engine ages. Vans, however, stay flat because their usage patterns are different. If you’re using a hybrid or electric vehicle, the same rates apply-HMRC doesn’t offer a premium for green tech in this context, though fuel costs might be lower, which affects your actual out-of-pocket expense versus the claim.

Understanding Subsistence: Food and Accommodation

Mileage isn’t the only thing you can claim. If an employee has to be away from their normal place of work for more than 24 hours, they can claim subsistence. This covers meals and accommodation. But here’s the catch: it must be "wholly, exclusively and necessarily" incurred for the job.

There is no fixed "per diem" rate set by HMRC for food like there is for miles. Instead, you claim the actual cost, provided it’s reasonable. A £15 sandwich at a motorway service station? Fine. A £60 steak dinner in London while on a business trip? Maybe not, unless you can justify why it was necessary.

Accommodation is similar. You claim the actual bill. However, if you stay in a hotel that includes breakfast, that’s part of the room cost. If you buy separate meals, those are subsistence. The key is avoiding personal luxuries. A spa treatment at the hotel? That’s personal, not business.

The Evidence Trail: What HMRC Will Ask For

This is where most people fail. They claim the money, but when HMRC does a compliance check, they can’t prove the journey happened or that the meals were business-related. Here’s what constitutes solid evidence:

• Travel Logs: A simple spreadsheet works. Date, destination, purpose of trip, miles driven, and who you met. Don’t just write "London." Write "Client meeting with XYZ Corp, 45 miles each way."
• Receipts: Keep every receipt for fuel (if claiming fuel-only), meals, and hotels. Digital photos are fine, but keep them organized by month or trip.
• Itineraries: For longer trips, a printed itinerary from booking sites helps show the timeline and necessity of the stay.
• Policy Document: Your company should have a written travel and expense policy. It should state the rates used and the approval process. This protects both employer and employee.

If you’re an employee claiming against your salary, your employer needs to verify these details before paying. If you’re self-employed, you’re keeping these records for your own tax return. Either way, the burden of proof is on you.

Common Pitfalls and How to Avoid Them

Even with good intentions, small errors add up. Here are the mistakes we see constantly:

1. Claiming Home-to-Work Travel: Unless your workplace is temporary (less than 24 months), the daily commute is a personal expense. No mileage claim allowed. If you work from home regularly, that’s also generally not claimable unless it’s your "place of business" for tax purposes (which is rare for salaried employees).
2. Overclaiming Fuel: If you claim the full 45p/mile, you can’t also claim fuel receipts. Pick one method. Most find AMAP easier because it covers insurance, maintenance, and depreciation too. Fuel-only is for those who want to track exact petrol/diesel costs, often because they drive very high miles and the 45p rate feels low compared to their actual spend.
3. Missing the 24-Hour Rule for Subsistence: If you leave home at 9 AM and come back at 8 PM the next day, that’s over 24 hours. You can claim meals. If you’re gone for 20 hours, strictly speaking, you shouldn’t claim overnight accommodation, though some companies allow it for convenience. Stick to the rule to be safe.
4. Ignoring the 10,000-Mile Threshold: If you cross that line mid-year, your rate changes for subsequent miles. Track your annual total carefully.

Employer vs. Employee: Who Pays?

The structure of the claim matters for tax calculations.

For Employers: When you reimburse an employee at the approved rate, it’s a deductible expense for your business. The employee doesn’t report it as income. If you pay *more* than the approved rate, the excess is taxable income for the employee. So, if you pay 50p/mile instead of 45p, that extra 5p is subject to Income Tax and National Insurance.

For Employees: If your employer doesn’t reimburse travel, you can claim it through Self Assessment (if you’re a higher-rate taxpayer) or via the Pay As You Earn (PAYE) system. Note that basic-rate taxpayers (20%) often can’t claim relief through PAYE because the tax saved equals the amount claimed, resulting in zero net benefit. Higher-rate taxpayers (40%+) will get a cash refund.

Practical Tips for Smooth Claims

Make your life easy with these habits:

• Use an App: Tools like Stride or Expensify automate mileage tracking. They sync with your phone GPS, creating an audit trail automatically.
• Set a Budget: Agree on a monthly cap for subsistence. If you’re in a city with high food costs, maybe £30/day is reasonable. In rural areas, £20 might suffice. Document this in your policy.
• Review Annually: Check HMRC’s website every April for rate updates. Set a calendar reminder.
• Keep Separate Accounts: If you use a personal car for business, try to keep a separate bank card for business fuel and tolls. It simplifies record-keeping significantly.

Remember, HMRC isn’t out to get you. They just want consistency. If your records are clear, your rates match the official guidelines, and your expenses look reasonable, you’ll rarely face issues. The goal is fairness: you should be made whole for business costs, but not profit from them.