Milometry55p or 76 cents: how the UK and US pay for business miles
Two countries, two systems, and a gap that is smaller than the exchange rate makes it look. The rates side by side, and the difference that matters.
Algemene informatie, geen advies. Geschreven als algemene informatie en voor zover wij weten juist op 27 september 2026. Belastingregels veranderen, en hoe ze uitpakken hangt af van je eigen situatie. Dit is geen belasting-, juridisch of financieel advies: vraag een accountant, een belastingadviseur of de Belastingdienst voordat je erop vertrouwt.
Both countries have a flat rate per mile for driving your own car for work. The mechanisms differ more than the numbers do.
The headline rates
UK. The approved mileage rate for cars and vans is 55p a mile for the first 10,000 business miles in the tax year, then 25p, for journeys from 6 April 2026. It had been 45p and 25p from 2011-12 to 2025-26. The rise was announced on 21 May 2026 and backdated to 6 April 2026.
US. The IRS publishes a standard mileage rate for business use, normally once a year and occasionally mid-year when fuel prices move sharply. For 2026 it is 72.5 cents a mile from 1 January to 30 June and 76 cents from 1 July. It was 70 cents for 2025.
At a rough exchange rate the two are close on the first 10,000 miles. After that, the UK rate drops to 25p and the US rate does not drop at all.
The structural difference that matters
The UK bands. The US does not.
HMRC's 10,000-mile threshold assumes that beyond a certain point your cost per mile falls. That is true of some costs and not others. Fuel scales with distance, and so do tyres and servicing.
The IRS rate applies to every business mile at the same rate, all year. On 30,000 business miles, the US rate applies in full to every one of them. In the UK the first 10,000 are at 55p and the other 20,000 at 25p, which averages 35p a mile.
For high-mileage drivers this is the single biggest difference between the two systems.
Who benefits, and how
UK employees. If your employer pays up to the approved rate, the payment is tax free and there is nothing to declare. Anything above it is taxable. If they pay less, you can claim Mileage Allowance Relief: tax relief on the gap, through Self Assessment or a P87. The relief is worth the gap multiplied by your tax rate, not the gap itself.
UK self-employed. Sole traders can use the same rates as simplified expenses, a deduction from profit, instead of claiming actual vehicle costs.
US. Most employees cannot deduct an unreimbursed business mile at all. Unreimbursed employee expenses stopped being deductible for most employees from 2018, and the One Big Beautiful Bill Act of 2025 made that permanent. The standard mileage rate mainly benefits the self-employed, and employees whose employers reimburse them under an accountable plan.
So the UK system is more generous to employees, and the US rate is more generous per mile to the self-employed.
The two systems side by side
| UK (HMRC) | US (IRS) | |
|---|---|---|
| Car rate | 55p, then 25p (from 6 April 2026) | 72.5 cents to 30 June 2026, 76 cents from 1 July 2026 |
| Banded by annual mileage | Yes, at 10,000 | No |
| Last change | 6 April 2026 (from 45p) | 1 July 2026 |
| Employee relief on a shortfall | Yes, Mileage Allowance Relief | Largely no |
| Self-employed | Yes, simplified expenses | Yes, standard mileage rate |
| Passenger payments | Up to 5p per passenger mile, only if the employer pays it | None |
| Commuting deductible | No | No |
| Contemporaneous record expected | Yes | Yes, explicitly |
At 30,000 business miles
| UK | US | |
|---|---|---|
| First 10,000 | £5,500 | Full rate on every mile |
| Remaining 20,000 | £5,000 | Full rate on every mile |
| Average rate | 35.0p | Unchanged from the headline rate |
The high-mileage self-employed driver does materially better in the US. The employee reimbursed below the approved rate does materially better in the UK.
Both demand the same evidence
This is where the two systems agree completely.
Both expect a contemporaneous log: date, destination, business purpose and distance. Both treat commuting as non-deductible. Both are sceptical of round numbers and reconstructions.
The IRS is, if anything, more explicit about wanting records made at or near the time of the journey. HMRC's expectation is the same in substance.
The practical lesson
Whichever side of the Atlantic you are on, the constraint is not the rate. It is whether you can evidence the miles. A generous rate applied to journeys you never recorded is worth nothing.
Sources
- Travel, mileage and fuel rates and allowances (HMRC)
- Increasing mileage rates (HMRC policy paper)
- Claim tax relief for your job expenses: vehicles you use for work (HMRC)
- Simplified expenses: vehicles (HMRC)
- Standard mileage rates (IRS)
- Topic no. 510, Business use of car (IRS)
- Publication 529, Miscellaneous Deductions (IRS)
General information for UK and US drivers, not tax advice. Rates change: check the current figure in the jurisdiction you are filing in.
