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HMRC has confirmed a 45p per mile tax handout for petrol drivers staying in place for the new 2026-27 tax year which started in April.

Drivers who use their own car for work purposes - such as driving to and from meetings or going out on jobs - can claim a tax relief worth 45p per mile directly from HM Revenue and Customs.

Those who aren't paid mileage expenses by their employer can instead directly claim relief for miles driven for work from HMRC.

As of April 2026, the rates are still set at 45p per mile for the first 10,000 miles of driving in a single year, which then drops to 25p per mile for all miles thereafter, for both cars and vans.

The money is supposed to repay both fuel and wear and tear (although with the price of petrol having skyrocketed, some cars are churning through as much as 20p per mile just on fuel).

The RAC explains: "If you're an employee and you use your own car for work purposes - perhaps for client meetings - or if you're a tradesperson and need to meet a customer, then you can claim. The amount you'll get back will factor in the number of miles you do.

"For vans and cars during the first 10,000 miles, you'll be able to claim up to 45p per mile and then 25p per mile after that. The 45p per mile is split into two consecutive parts; fuel and wear and tear. As an employer, you may want to think about passenger rates. This is where employers can claim an extra 5p per mile for each passenger they take during a business trip."

In order to make claims, you'll need to keep a record of all journeys taken and where you went to and from, including the mileage, the date of the trip and the reason for the journey.

However, you can't claim for commuting to and from work and you can't claim for personal journeys, even if they're taken in work hours.

It's not just for petrol drivers, though. Under current rules, EV drivers can also claim the full 45p per mile, dropping to 25p after 10,000 miles.

As RAC explains, this can be a big tax relief given that EV charging can be as cheap as 5p per mile.

It says: "This can help you to save quite a significant amount when you consider that the average price of electricity per mile is around 5p. If your electric vehicle is under £40,000 and it was registered before 31st March 2017, you will also save on vehicle tax too."