From 6 April 2026, the HMRC approved mileage rate for employees using their own car for work is increasing from 45p per mile to 55p per mile for the first 10,000 business miles in the tax year.
For families employing a nanny, this is an important change where your nanny uses their own car as part of their duties.
When does mileage apply for a nanny?
Mileage may apply where your nanny uses their own vehicle for work-related journeys, such as:
Taking children to or from school, nursery or clubs
Driving children to activities, appointments or playdates
Running errands as part of their nanny duties
Travelling between locations during the working day for the benefit of the family
It does not apply to the nanny’s normal commute from their home to your home, as this is classed as ordinary commuting.
What is the new rate?
From April 2026, the approved mileage rates for cars and vans are:
Mileage in the tax year | HMRC approved rate |
First 10,000 business miles | 55p per mile |
Business miles over 10,000 | 25p per mile |
This means that if your nanny drives 100 business miles in a month using their own car, the tax-free mileage reimbursement would be:
100 miles x 55p = £55.00
Previously, the same mileage would have been reimbursed at £45.00, so the change increases the payment by £10.00 for every 100 miles.
Is the 55p rate compulsory?
The HMRC rate is the amount that can normally be reimbursed tax-free. It is not automatically a legal requirement to pay that rate unless it has been agreed in the nanny’s contract or employment terms.
If your nanny’s contract states that mileage will be paid at the HMRC approved rate, you should update payments to 55p per mile from April 2026.
Why keeping records matters
Mileage payments should be supported by a clear record of the journeys being claimed. We recommend keeping a simple mileage log showing:
The date of the journey
Where the nanny travelled from and to
The reason for the journey
The number of business miles
The total amount being reimbursed
This helps ensure the payment is treated correctly and avoids confusion later.
Does mileage go through payroll?
Mileage paid at or below the HMRC approved rate for genuine business journeys is normally treated as a tax-free reimbursement rather than taxable pay.
That means it does not usually increase the nanny’s gross salary, tax, National Insurance or pensionable pay.
If you pay more than the approved rate, the excess may need to be treated as taxable earnings.
What should employers do now?
If your nanny uses their own car for work, now is a good time to:
1. Check what mileage rate is stated in their contract
2. Update any payroll or payment records from April 2026
3. Make sure mileage claims are being recorded clearly
4. Agree how and when mileage will be reimbursed each month
At NannyPaye, we can help families understand how mileage should be treated and ensure any reimbursements are handled correctly alongside payroll.