Travel is one of the most commonly claimed business expenses in the UK — and one of the most commonly claimed incorrectly. Whether you’re a sole trader driving to client meetings, a limited company director heading to a site, or an employer reimbursing your team’s mileage, claiming travel expenses the right way matters.

The good news for 2026-27 is that the approved mileage rate has increased for the first time in 15 years, from 45p to 55p per mile for the first 10,000 business miles. For people doing a decent amount of business driving, that’s a meaningful difference. But the rate change doesn’t rewrite the underlying rules — and those rules still catch people out regularly.

In this post, we’ll walk through what qualifies as a legitimate business travel expense, what the current rates look like, where the updated accommodation guidelines sit, and the mistakes we see most often when clients come to us having done this themselves.

The starting point for any travel claim is HMRC’s definition of a qualifying business journey. Put simply, travel is allowable when the trip is undertaken wholly and exclusively for business purposes, and it isn’t ordinary commuting.

That last point is the one that trips people up the most. Your regular journey from home to a fixed place of work — an office you go to every day, a depot you report to — is commuting, and it isn’t claimable. HMRC has a specific concept called a “permanent workplace” to describe this. Travel to anywhere that isn’t your permanent workplace — a client site, a one-off meeting in another city, a temporary project location — generally is claimable.

For sole traders and home-based workers, this can get more nuanced. If your home is your only place of work, then any travel to a client’s premises or a meeting is a legitimate business journey. That’s an important distinction, and it’s one reason why having a clear record of your working arrangements matters.

The other key principle: the journey must be for business, not merely incidentally passing through business territory. A two-hour detour to visit a supplier tacked on to a personal holiday weekend isn’t claimable just because you did some business at one end.

From April 2026, the approved mileage allowance payment (AMAP) rates are:

• Cars and vans: 55p per mile for the first 10,000 business miles in the tax year, then 25p per mile thereafter
• Motorcycles: 24p per mile for all business miles
• Bicycles: 20p per mile for all business miles
• Passenger payments: 5p per passenger per business mile, where you’re carrying a fellow employee

The 55p car and van rate is the first uprating since 2011, when it rose from 40p to 45p. For context, a driver doing 6,000 business miles in a year will see their allowable claim increase by £60 compared with last year — a modest but welcome improvement.

These rates apply in two contexts. For the self-employed, they’re what you use to calculate the deductible cost of business mileage in your accounts. For employers reimbursing employees, paying up to the AMAP rate creates no taxable benefit — meaning no National Insurance, no PAYE, no P11D headache. If you pay less than the rate, employees can claim Mileage Allowance Relief on the shortfall through Self Assessment.

One thing worth noting: these rates apply to privately owned vehicles. Company car mileage uses Advisory Fuel Rates, which are updated quarterly and work differently — that’s a separate conversation.

If business travel requires an overnight stay, the accommodation and subsistence costs are generally claimable too — provided the trip itself qualifies as a business journey rather than commuting.

HMRC publishes guideline rates to help employers manage overnight expense claims without needing to check every single receipt. As of 17 March 2026, those guideline rates have been updated as follows:

• London: £165 per person per night (inclusive of VAT)
• Liverpool, Manchester, Birmingham, Leeds, and Newcastle: £120 per person per night (inclusive of VAT)
• Elsewhere in the UK: £100 per person per night (inclusive of VAT)

The increase for those five major cities is particularly relevant for businesses in the North and Midlands — Manchester now sits in the same bracket as London’s secondary tier, reflecting the realities of hotel pricing in city centres. The previous rate of £100 (which was exclusive of VAT) had quietly fallen behind actual costs, especially after inflation in the hospitality sector over the past couple of years.

These are guideline rates, not hard caps. You can claim above them if you have receipts to justify it and the cost was reasonable for the location and circumstances. The guidelines exist primarily to simplify administration for employers — they don’t override the basic rule that expenses must be wholly and exclusively for business.

In our experience working with owner-managed businesses, a handful of mistakes come up again and again when it comes to travel claims.

Claiming commuting as business mileage

If you have a fixed office or workshop that you go to regularly, travel to and from that location isn’t a business expense. This catches out limited company directors particularly — you can’t simply decide your home is your “head office” to make your daily drive to your studio or unit claimable.

Not keeping a mileage log

HMRC can ask you to justify any mileage claim. Without a log showing the date, destination, purpose, and miles driven for each journey, you’re relying on memory and goodwill — neither of which HMRC is known for in an enquiry. A simple spreadsheet or a mileage tracking app takes minutes and protects you entirely.

Mixing personal and business trips

A trip that’s partly personal and partly business generally isn’t fully claimable. You’d need to apportion it, or in many cases the whole journey fails the “wholly and exclusively” test. Be honest about this — HMRC’s view tends to be that if the personal element is what made the trip happen, the business component is incidental.

Forgetting passenger payments

If you carry an employee in your car for a business journey, you can pay an additional 5p per mile per passenger — and that’s still within the AMAP regime. Few employers take advantage of this, but it’s worth knowing.

If you operate through a limited company, the same principles apply — but there are a few wrinkles worth flagging.

When a director uses their personal vehicle for business, the company can reimburse them at the approved mileage rates and the reimbursement is a deductible expense for the company, with no taxable benefit for the director. This is often the most tax-efficient approach for directors who don’t do enormous mileage — far simpler than a company car arrangement in many cases.

Company cars and vans bring in a different set of rules. The van benefit charge for 2026-27 is £4,170, which represents the taxable benefit-in-kind if you use a company van for any private use. There are exemptions for insignificant private use, but “popping to the supermarket in the work van” is not insignificant in HMRC’s view.

For travel subsistence — meals, coffees, overnight stays — a director can claim these through the company provided the trip is a genuine business journey away from any permanent workplace. The company should either reimburse against receipts or operate a dispensation arrangement. Blanket monthly payments to directors for “travel” without underlying evidence are a red flag if HMRC ever looks closely.

If you’re unsure whether a particular arrangement is compliant, the answer is usually to keep better records rather than to stop claiming legitimate expenses. Most directors we speak to are under-claiming, not over-claiming.