Mileage Deductions Explained: US IRS Standard Mileage vs UK HMRC AMAP

If you drive for work — client meetings, job sites, deliveries, a side gig — the miles add up fast, and so does the cost of running the vehicle. Both the US and UK tax systems let you claim something back for that business driving, but they do it in almost opposite ways. The US bundles every cost of ownership into a single flat rate per mile. The UK starts high and then drops the rate once you pass a threshold. Neither number is something you should memorize and reuse forever, because both are revised on their own schedules — but understanding the mechanism behind each one tells you exactly what to track and what to double-check before you file.

The US approach: one flat rate that covers everything

The IRS offers a “standard mileage rate” as a shortcut. Instead of tracking gas receipts, oil changes, tires, insurance premiums, and depreciation separately, you multiply your business miles by a single published rate and that’s your deduction (or, if an employer reimburses you at that rate, your tax-free reimbursement). The rate is designed to approximate the average per-mile cost of owning and running a vehicle — fuel is only one slice of it; depreciation and insurance are usually bigger.

The IRS actually publishes three different rates each year, because the tax treatment differs by purpose:

• Business — the rate for self-employed people and (in limited cases) employees driving for work.
• Medical or moving — a lower rate for miles driven to receive medical care, or moving for military orders.
• Charitable — the lowest rate, and unusual in that it’s fixed by statute rather than adjusted for vehicle costs, so it moves far less often than the other two.

The IRS reviews and announces these rates each December for the following tax year (and has occasionally issued a rare mid-year revision when fuel prices spiked). That means the number you used last year is not automatically this year’s number — always confirm the current rate at irs.gov before you rely on it.

Who can actually use it — and the trap almost everyone falls into

The single biggest mistake people make with US mileage deductions is including their commute. Driving from home to your regular workplace is personal, not business, no matter how far it is — the IRS draws a hard line here. What counts is driving between business purposes: office to client site, client to client, home to a temporary job location, or a supply run for the business. You need a contemporaneous log — date, purpose, and miles — because “I probably drove around 8,000 miles for work” doesn’t survive an audit.

There’s also an alternative: the actual expense method, where you deduct the real, receipted cost of gas, repairs, insurance, and depreciation, prorated by the business-use percentage of your total mileage. It can produce a bigger deduction for an expensive or heavily-used vehicle, but almost nobody bothers, because it demands you keep every fuel and repair receipt for the whole year and calculate a business-use percentage — compared to the standard method’s one log and one multiplication. Most self-employed drivers with a normal daily-use car come out ahead, or close to even, sticking with the standard mileage rate simply because the record-keeping is so much lighter.

Worked example (US): Say you’re self-employed and logged 8,400 business miles this year, all client-related driving with no commuting mixed in. At an illustrative business rate of $0.70/mile, the deduction is 8,400 × $0.70 = $5,880. Swap in the medical/moving rate of $0.21/mile for a medical-travel scenario and the same mileage yields $1,764 instead — a reminder that purpose, not just distance, drives the number.

The UK approach: a tiered rate that rewards light business use

HMRC’s Approved Mileage Allowance Payments (AMAP) scheme works differently. Rather than one flat number, cars and vans get a two-tier rate within each tax year: a higher rate on the first 10,000 business miles, then a lower rate on everything after. Motorcycles and bicycles each get their own flat rate with no tiering.

The classic AMAP structure is 45p per mile for the first 10,000 business miles in the tax year, dropping to 25p per mile after that, with motorcycles at a flat 24p and bicycles at 20p. Why the tier at all? The logic is that a car’s fixed costs — insurance, financing, depreciation — are largely paid whether you drive 2,000 miles or 20,000 miles a year, so the first chunk of business mileage is allowed to recover a bigger share of those fixed costs per mile. Past 10,000 miles, the marginal cost of an extra mile is mostly just fuel and wear, so the rate steps down. It also discourages inflating the deduction by simply driving further.

Unlike the IRS’s annual rate dance, HMRC’s AMAP figures have historically stayed fixed for long stretches — sometimes years — before being revisited, so it’s easy to assume they never change. They can, and periodically have. As with the US side, treat any specific number as an illustration and verify the live rate at gov.uk before you rely on it for a tax return or a reimbursement policy.

Worked example (UK): A courier drives 13,500 business miles in a car this tax year. The first 10,000 miles are paid at 45p, the remaining 3,500 at 25p: (10,000 × £0.45) + (3,500 × £0.25) = £4,500 + £875 = £5,375. Stay under the 10,000-mile threshold — say 7,000 miles — and it’s simpler: 7,000 × £0.45 = £3,150, with no second tier to calculate at all.

Same idea, different shape

Both schemes exist for the same reason: driving for work costs real money, and per-mile rates save you from itemizing every fuel receipt and oil change. The US keeps it flat but splits by purpose; the UK keeps purpose aside (business mileage is business mileage) but tiers by distance. In both countries, the published number is a moving target reviewed on its own schedule, never a fact you should treat as permanent.

None of the figures in this article — or in the calculator — are current-year tax advice. They’re illustrative defaults so you can see how the formulas behave. Before you file a return, submit an expense claim, or set a company reimbursement policy, check the live rate at irs.gov for US business, medical, or charitable mileage, or at gov.uk for the current UK AMAP rates, and confirm the details with a qualified tax professional if your situation is anything but straightforward.

To run your own numbers with an editable rate field for either country, use the Mileage Deduction & Reimbursement Calculator — enter your miles, pick US or UK, override the rate with whatever figure you’ve confirmed for the current tax year, and it handles the UK’s 10,000-mile tier automatically.