MilometryThe IRS moves to 65.5 cents, and Britain does not move at all
America revises its mileage rate every year, sometimes mid-year. Britain held 45p from 2011 to 2026. The difference in method matters more than the number.
Información general, no asesoramiento. Redactado como información general y correcto según nuestro conocimiento a 27 de septiembre de 2026. Las normas fiscales cambian y su aplicación depende de tus circunstancias. Esto no es asesoramiento fiscal, jurídico ni financiero: consulta a un contable, un asesor fiscal o la administración tributaria antes de basarte en ello.
Updated 27 September 2026: this post was written in February 2023 and its figures are 2023 figures. Since then the IRS business rate has been 67 cents (2024), 70 cents (2025), 72.5 cents (1 January to 30 June 2026) and 76 cents (from 1 July 2026). The UK car and van rate rose from 45p to 55p for journeys from 6 April 2026 (announced 21 May 2026), its first change since 2011.
The IRS standard mileage rate for business use is 65.5 cents a mile for 2023, up from 62.5 cents in the second half of 2022. Britain's approved rate is 45p, where it has been since April 2011.
The gap in the numbers is smaller than it looks. The gap in how the two are maintained is enormous.
America revises, Britain declares
The IRS sets its rate annually, based on a study of the fixed and variable costs of running a car. When fuel moves sharply enough, it will revise mid-year rather than wait: it did exactly that in 2022, lifting the rate on 1 July because petrol had run away from the figure set in January.
That is a rate that is maintained. It can be too low for a given driver in a given year, but the mechanism is pointed at the actual cost of motoring and is checked against it.
Britain, at the time of writing, sets a figure and leaves it. 45p was set in 2011 and has survived a decade in which fuel, insurance, tyres and servicing have all risen substantially. There is no annual review that produces a number, and no trigger that forces one.
What that does to a driver
For an American, the rate broadly tracks costs, so the claim broadly covers them.
For a British driver, the rate has been slowly detaching from reality. The consequence is not that claims get refused. It is that the approved amount covers less of the cost each year, and the shortfall is absorbed by the driver rather than by anyone who decided anything.
The drivers who feel it first are the ones running older, thirstier or more heavily used vehicles, where the real cost per mile was already above average.
The banding difference
The other structural difference is the threshold.
The IRS rate applies to every business mile at the same rate, all year. There is no equivalent of Britain's drop to 25p after 10,000 miles.
For a high mileage driver this dwarfs the headline gap. A British driver covering 30,000 business miles gets 45p on the first third and 25p on the rest, blending to a little under 32p. An American gets the full rate on all 30,000.
| US, 2023 | UK, 2023 | |
|---|---|---|
| Business rate | 65.5 cents per mile | 45p per mile, then 25p |
| Banded by annual distance | No | Yes, at 10,000 miles |
| How it is set | Annual cost study, revised mid-year if needed | Set in 2011, unchanged |
| Passenger supplement | None | Up to 5p per passenger mile, only if the employer pays it |
| Commuting | Not deductible | Not claimable |
Who can actually use it
One caveat that catches British readers admiring the American rate: most US employees cannot deduct an unreimbursed business mile at all, because unreimbursed employee expenses were suspended as an itemised deduction from 2018. (That suspension was due to end after 2025. The One Big Beautiful Bill Act of 2025 made it permanent.) The standard mileage rate mainly serves the self employed, and employees whose employers run an accountable reimbursement plan.
Britain is the more generous of the two to an ordinary employee, because Mileage Allowance Relief gives you tax relief on the gap when your employer pays below the approved rate. There is no American equivalent for most people.
So: the US rate is better maintained and better for the self employed. The UK system is better for employees. Neither is simply more generous.
The bit both agree on
Both tax authorities expect a contemporaneous record, and both are unimpressed by reconstructions. The IRS is unusually explicit that a log should be made at or near the time of the journey. HMRC's expectation is the same in substance even where the wording is softer.
A well maintained rate applied to journeys you never wrote down is worth exactly as much as a badly maintained one.
Sources
- Standard mileage rates (IRS)
- Topic no. 510, Business use of car (IRS)
- Publication 463, Travel, Gift, and Car Expenses (IRS)
- Publication 529, Miscellaneous Deductions (IRS)
- Travel, mileage and fuel rates and allowances (HMRC)
- Increasing mileage rates (HMRC policy paper), the 2026 rise to 55p
General information for UK and US drivers, not tax advice. Rates change: check the current figure in the jurisdiction you are filing in.
