Tesla business mileage allowance in the UK: 55p, 25p and the 10,000-mile rule

The difficult part is not multiplying miles by a rate. It is keeping a defensible record of which journeys were business travel, how many qualifying miles you drove and when the 10,000-business-mile threshold was crossed.

1. What is the HMRC business mileage rate for 2026/27?

For tax year 2026/27, HMRC's Approved Mileage Allowance Payment rate for a car or van is 55p per business mile for the first 10,000 business miles and 25p per mile after 10,000. The increase from the previous 45p first-band rate took effect from 6 April 2026.

For a quick calculation, use the HMRC mileage rates 2026/27 calculator. It applies the 55p rate to the first 10,000 qualifying business miles and 25p thereafter.

The 10,000-mile threshold is based on qualifying business mileage, not your Tesla's total annual mileage. HMRC also groups mileage in cars and vans within the same vehicle category for the AMAP calculation, so changing cars does not normally restart the first 10,000-mile band.

2. Example: 12,000 business miles in your own Tesla

This is the HMRC approved amount. It is not a legal requirement that an employer pays exactly this amount. An employer may pay less, exactly the approved amount, or more. The tax treatment then depends on the amount paid and the qualifying business mileage.

3. Which Tesla journeys count as business mileage?

Ordinary commuting — normally home to a permanent workplace and back — is private travel for HMRC purposes. Customer visits, travel between workplaces and qualifying travel to a temporary workplace can be business travel. That means an automatic trip logger can capture the facts, but it should not silently guess the tax treatment from the route alone.

4. Employers still need records even when the payment is tax-free

If mileage allowance payments stay within the approved amount, the payment can be exempt from tax. But HMRC still expects the employer to keep records of the payments made and the business journeys to which they relate. This is the practical reason a mileage log matters even when there is nothing to report to HMRC for the payment itself.

A useful record should therefore let the employer or employee get from a monthly total back to the individual journeys behind it.

5. What should DriveQuery record?

The factual journey data can come from the Tesla connection: date, time, origin, destination, distance and route context. The driver then adds or confirms the part the car cannot know reliably — the business purpose.

The goal is not to ask the driver to recreate a diary every month. It is to record every journey first, learn recurring categories and surface only the uncertain journeys for review.

6. The 55p rate applies to your own car — not a company Tesla

The AMAP scheme on this page applies where an employee uses their own car or van for business travel. A company Tesla follows different reimbursement rules. The distinction matters because applying the 55p rate to a company car would produce the wrong tax treatment.

If you drive a company Tesla, use the separate company Tesla business-mileage guide for the HMRC Advisory Electric Rates and the business/private split.

7. What if the employer pays less than the approved amount?

The employee may be able to claim Mileage Allowance Relief on the shortfall between HMRC's approved amount and qualifying mileage payments received from the employer. That is a separate calculation — and another reason to maintain the full business-mile total even if the employer reimburses only part of it.

See the full Mileage Allowance Relief guide and example →

Calculate your HMRC approved amount →

Frequently asked questions

Sources: HMRC – Mileage Allowance Payments 2026/27, HMRC – 2026 mileage-rate increase, HMRC – employer record-keeping for mileage payments and HMRC – ordinary commuting and private travel.