Mileage Claims for Limited Company Directors: AMAP vs Salary

What Is the AMAP Rate?

The Approved Mileage Allowance Payment (AMAP) rate is the amount HMRC allows your limited company to reimburse you for using your personal vehicle for business journeys — completely free of tax and National Insurance. As of September 2026, the rates remain:

• Cars and vans: 45p per mile for the first 10,000 business miles in a tax year, then 25p per mile thereafter
• Motorcycles: 24p per mile
• Bicycles: 20p per mile

These rates are designed to cover fuel, wear and tear, insurance, and other running costs associated with using your own vehicle for work.

Why This Beats Taking Extra Salary

When your company pays you additional salary, that money is subject to both employer's National Insurance (currently 15% from April 2025) and employee's National Insurance, plus income tax at your marginal rate. On a higher-rate taxpayer basis, that's potentially over 50p in every extra pound lost to tax before you even see it.

Mileage reimbursed at or below the AMAP rate is entirely different. It is not classed as income. You pay no income tax on it, no employee's NI, and your company pays no employer's NI. The company also gets corporation tax relief on the full reimbursement, making it a win on both sides of the equation.

A Simple Example

Suppose you drive 8,000 business miles in the 2026/27 tax year using your personal car. Here's what the numbers look like:

• 8,000 miles × 45p = £3,600 reimbursed to you, tax-free
• Your company deducts £3,600 as a business expense, saving 25% corporation tax = £900 saved
• You receive £3,600 in hand with no personal tax liability whatsoever

Compare that to taking £3,600 as extra salary. After employer's NI, employee's NI, and higher-rate income tax, the combined tax cost could easily exceed £2,000. The mileage route keeps significantly more money in your pocket.

How to Do This Correctly

HMRC will only accept mileage claims if you keep proper records. You must log every business journey, and your records should include:

• The date of each journey
• The start and end locations
• The purpose of the trip (e.g. client meeting, site visit)
• The number of miles travelled

A simple spreadsheet works fine, though dedicated mileage tracking apps are increasingly popular. Your company then reimburses you based on your mileage log, and that payment goes through your company accounts as a business expense — not payroll.

What Counts as a Business Journey?

This is where many directors trip up. Commuting from your home to a regular, permanent workplace does not qualify — HMRC treats that as ordinary commuting, not business travel. However, journeys to client sites, supplier meetings, temporary workplaces, or networking events absolutely do count. If you work from home and your home is your principal place of business, travel to client locations is generally claimable.

What If You Go Over the AMAP Rate?

Your company can pay you more than 45p per mile, but any amount above the AMAP rate becomes a taxable benefit in kind and must be reported on a P11D. Stick to the approved rates to keep the process clean and entirely tax-free.

The Bottom Line

For limited company directors using their own vehicles for business, mileage claims at the AMAP rate are one of the simplest and most powerful tax-efficiency tools available. Keep accurate records, stay within the approved rates, and you'll extract real value from your business journeys without a penny of unnecessary tax.