Car Mileage Allowance in Manchester: 2026 Update for Local Drivers

The car mileage allowance for 2026/27 is 55p a mile for the first 10,000 business miles, then 25p a mile. That is up from 45p and it counts from 6 April 2026, so Manchester drivers can claim the higher rate on every qualifying mile this tax year.

This update is for drivers who already know the basics and want to know what changed, what to do about miles already logged at the old rate, and which Manchester rules still matter. For the full method, read our original car mileage allowance guide for Manchester drivers. Everything here is specific to the 2026/27 change.

Key takeaways

• The first 10,000 business miles are now worth 55p each, up from 45p. Miles above 10,000 stay at 25p.
• The rise took effect from 6 April 2026 even though HMRC (HM Revenue and Customs) announced it on 21 May 2026, so there is no mid-year split of rates.
• You do not need to restart your log. Keep your original entries and recalculate the total at the new rate.
• Manchester has no Clean Air Zone charge, and black cab drivers still cannot use simplified mileage.

What is the car mileage allowance?

The car mileage allowance is a flat rate per business mile that HMRC lets you claim instead of tracking fuel, insurance, servicing and depreciation. Self-employed drivers use it as simplified expenses. You multiply your logged business miles by the rate and enter the result on your Self Assessment return.

What changed in the 2026/27 car mileage allowance?

Only one number changed: the rate for the first 10,000 business miles in a car or van moved from 45p to 55p. According to HMRC's guidance on increasing mileage rates, the measure was announced on 21 May 2026 and has retrospective effect from 6 April 2026.

The 25p rate for miles above 10,000 did not change. The motorcycle rate stayed at 24p and the bicycle rate at 20p. The same GOV.UK guidance says that the self-employed simplified rates rose alongside the employee rates, so sole traders get the same uplift.

The official table is on GOV.UK's travel mileage and fuel rates and allowances page, and the self-employed version is on the simplified expenses vehicles page. Check both before you file, because the page is updated each tax year.

Why does the mid-year rate rise not split my year in two?

Because HMRC made the rise retrospective, the whole of 2026/27 uses 55p for the first 10,000 miles. You do not claim 45p for April and May and 55p after that. Your annual total is calculated once, at year end, using the new bands on your total business miles.

Many drivers set up a spreadsheet or app in April with the old 45p rate built in. That is a common source of under-claiming this year. The miles themselves are fine. Only the formula needs changing.

Why the 10,000-mile band is the real number to watch

The extra 10p only applies to the first 10,000 miles. A part-time Manchester driver covering 6,000 business miles gains the full 10p on every mile. A full-time driver covering 25,000 gains it on only the first 10,000. So the benefit is capped at 10,000 miles multiplied by 10p, which is £1,000 of extra deduction at most.

How do I update my mileage records for the new rate?

Keep every original log entry exactly as it is and change only the rate used in your calculation. Your evidence is the date, start and end point, purpose and miles of each trip. The rate is just arithmetic applied afterwards, so you should not edit past trips to fit it.

1. Open your log, spreadsheet or app and find where the rate is set. Look for 45p or a formula that multiplies by 0.45.
2. Change the rate for the first 10,000 miles to 55p for the 2026/27 tax year, which started on 6 April 2026. Leave the 25p band as it is.
3. Check that trips before 21 May 2026 are included. Some apps lock earlier entries at the old rate, so recalculate those manually if needed.
4. Add a one-line note stating the date you updated the rate and why, citing the GOV.UK page.
5. Total your business miles to date and apply both bands: up to 10,000 at 55p, anything above at 25p.
6. Save a dated copy of the log. Keep it with your other records for at least the period GOV.UK sets out.

Our guide to mileage logs and HMRC record keeping shows what a strong log looks like. You can also test your own figures with the mileage calculator.

Can I switch from actual costs to simplified mileage now the rate has risen?

Usually not for the same vehicle. GOV.UK says that once you use simplified mileage for a vehicle you must continue to while you use that vehicle in your business, and you cannot use it for a vehicle you have already claimed capital allowances on or included as an expense.

A higher rate can make simplified mileage look more attractive, and the official guidance acknowledges that. But the choice is made when you first use a vehicle in the business. If you buy or lease a different car, you can choose again for that car. If you already claim actual costs on your current car, stay with that method for the life of that vehicle.

Simplified mileage versus actual costs after the rise

The right method depends on your costs, not on the headline rate alone. Our guide to allowable expenses for Uber drivers lists what actual-cost claimants can include.

What is the worked example for a Manchester driver?

This illustrative example uses an invented driver and invented figures to show how the update changes a claim. It is not a prediction of your own result, because every driver's mileage and costs differ.

What stays the same for Manchester drivers?

Everything about eligibility and evidence is unchanged. Only sole traders and eligible partnerships can use simplified mileage, you still need a mileage log, and home-to-work commuting is still not a business mile. Parking and tolls can usually be claimed in addition to the mileage rate, but fuel and servicing cannot, because the flat rate already covers them.

According to GOV.UK's simplified expenses guidance, you must keep records of your business mileage throughout the tax year. If you drive a limited company car instead, the rules differ, so read our piece on mileage allowance for limited company drivers.

What are the Manchester licensing and Clean Air rules in 2026?

Greater Manchester has no Clean Air Zone charge, and private hire drivers need a licence from the council that licensed them. Both facts affect your records. There is no daily charge to claim, and the vehicle you claim mileage on must be the one properly licensed for your work.

Licensing: one standard, ten councils

Manchester City Council is the licensing authority for drivers, vehicles and operators it licenses. As Bury Council's page on minimum licensing standards explains, the ten Greater Manchester councils share common minimum licensing standards covering driver, vehicle and operator licences.

Those standards include vehicle conditions such as emissions, age and livery. For the current detail, use the council's own licensing pages or the GM standards website, because the rules have been revised more than once. If a standard forces you to change cars, remember that a new vehicle gives you a fresh choice of claim method.

Clean Air Plan: no charge, but support funds exist

The Greater Manchester Clean Air Plan states there are no clean air charges to drive anywhere in Greater Manchester. The plan relies on investment instead, including a Private Hire Vehicle Support Fund of £2 million, an £8 million Hackney Support Fund, and a target of meeting nitrogen dioxide limits by the end of 2026.

Check eligibility and the current amounts directly with the scheme, because funding can close or change. Treat any grant as a tax matter in its own right and ask an accountant how it should be recorded. Do not assume it reduces or increases your mileage claim.

How do I work out if my records pass an HMRC check?

Your records pass when each trip can be traced to a date, route, purpose and mileage figure. HMRC does not prescribe an app, but it expects evidence made at or near the time of travel. A log rebuilt from memory months later is the weakest kind.

GOV.UK says that you should keep records for at least 22 months after the end of the tax year if you file on time, and for longer if you are self-employed. As an illustration, for 2026/27 filed by 31 January 2028, that points to at least the end of January 2029. Keeping them for longer costs nothing.

What a good Manchester log shows

• The date and the start and end postcodes, such as Piccadilly to Manchester Airport.
• The business purpose, for example airport transfer or hotel pick-up.
• The miles driven, taken from the odometer or a GPS record.
• Your odometer reading at the start and end of the tax year.
• Receipts for parking or tolls claimed in addition to mileage.

What are the common mistakes, and the penalty each triggers?

Most mileage errors come from using an out-of-date rate, claiming private miles or missing records. HMRC can open a compliance check on any return, and an inaccurate return can lead to a penalty and interest. Penalty levels depend on whether the error was careless or deliberate, so check the current rules on GOV.UK.

What if I drive in Manchester for more than one app?

Add up all business miles across every platform for the tax year, then apply the bands once. Do not claim a separate 10,000-mile allowance for each app. The 55p band is shared across your whole self-employment, so splitting it would over-claim.

This matters most for drivers who combine private hire work with delivery work. All of it is one trade for this purpose in most cases. If your set-up is more complex, such as a partnership or a limited company, check with an accountant. Our Manchester driver checklist covers the wider set of local tasks.

Key terms

• HMRC: HM Revenue and Customs, the UK tax authority.
• Simplified expenses: flat-rate claims HMRC allows for vehicles, working from home and living at business premises.
• AMAP: Approved Mileage Allowance Payments, the rates HMRC sets for business mileage in your own vehicle.
• NIC: National Insurance contributions.
• PHV: private hire vehicle.
• Self Assessment: the system for reporting self-employed income to HMRC.

How Uber Driver Accountant helps

We are an accountancy practice for drivers only, and we are independent of Uber and Bolt. Our fixed fees start from £20 a month, with no surprise bills. We can check whether simplified mileage or actual costs suits your car and update your records for 2026/27.

See how we handle your return on our personal tax service page, check the fixed fees on our pricing page, or read more about drivers in Manchester.

Conclusion and next step

The 2026/27 rise to 55p a mile is simple to apply once your records use the right rate. Update your formula, keep your original log, apply the two bands to your full-year miles, and keep the working. If you would like a second pair of eyes before you file, contact us for a fixed-fee quote.

Last reviewed 3 October 2026 by the Uber Driver Accountant tax team.

This article is general information and is not personal tax advice. Speak to a qualified accountant about your own circumstances, and use professional representation if HMRC raises a dispute or penalty.