HMRC Announces Fuel Rate Changes

HMRC have announced the first change in the AMAPSrate since 2011, reflecting the rising cost of fuel and fuel duty. The changeis part of a series of measures announced 21 May 2026. Importantly this ratechange is backdated to the start of the tax year, so you will need to decide ifyou are going to backdate payments to employees or whether to simply apply thenew rate from this point on.

Employees will be able to claim the differencebetween amounts reimbursed and the official AMAPs rate via self-assessment orby using the onlineform, if you do not backdate payments.

Approved Mileage Allowance Payments (AMAPs),Mileage Allowance Relief (MAR) and self-employed mileage  

Increases to AMAPs, MAR and self-employed mileage will be backdated to 6 April 2026 for the 2026 to 2027tax year. The changes to rates are: 

·      increase to 55 per mile for thefirst 10,000 miles 

·      remain at 25p per mile for mile10,001 and over 

The job expenses tax relief claim forms are beingupdated with the new mileage rates. HMRC have advised they will confirm in afuture Agent Update when the new forms will be live and you can submit a claimfor mileage relief.

Self-employed individuals will be able to use thenew rates in their 2026 to 2027 tax return, due on:

·      31 October 2027 if completed bypost 

·      31 January 2028 if filedonline  

The Business Income Manual expenditure on motor vehiclesguidance will be updated on Thursday 21 May 2026.

Other measures introduced to ease the burden offuel costs include:

·     Red diesel - The duty rate on red diesel being cut from 10.18p per litre to 6.48p perlitre from 15 June until 31 December 2026  

·     Heavy Goods Vehicle (HGV)Vehicle Excise Duty (VED) - Over the next 12 months, whenhauliers renew their HGV VED, they will pay £1 only. 

These changes have been initiated in response to the Irancrisis, although there have been campaigns by various motoring and transportbodies to raise the AMAPs rate for some years.

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