What does the change to business mileage rates mean for directors?

What is the mileage rate increase? 

The Chancellor has announced an increase to approved mileage allowance payments (AMAPs), which have been frozen for many years. These rates apply to cars an employee owns personally when used for qualifying business mileage.  

This was announced on 21st May 2026 as part of the Government’s Great British Summer Savings scheme but crucially, this change can be backdated to the start of the 2026/27 tax year. 

Therefore, from 6th April 2026, the rate for business mileage increases to 55p per mile for the first 10,000 miles (with 25p per mile applying thereafter). 

How does this affect company directors? 

As a director of a limited company, where you have already been reimbursed at the old rates, it is likely you will wish to top up the difference to the new AMAP. This can be done by paying the additional amount or, more likely, by crediting it to your director’s loan account.  

Provided the total reimbursement does not exceed the new AMAP, it remains tax-efficient and is treated as a normal business expense. 

To claim relief, you need to keep a contemporaneous record of the qualifying business mileage you have made during the tax year.

First published 8 Jun 2026

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