Chancellor Rachel Reeves has confirmed a significant boost for drivers who use their own vehicles for work, with mileage rates increasing by 10p per mile. This change means employees covering 10,000 miles for business purposes could receive up to an extra £1,000 in tax-free allowances.
New Mileage Rates Announced
The Treasury has confirmed that the approved mileage allowance payment (AMAP) will rise from 45p to 55p per mile for the first 10,000 miles driven in a financial year. For any mileage beyond that threshold, the rate will remain at 25p per mile. This adjustment applies to workers who need to use their personal cars for business travel, excluding regular commuting.
Who Benefits?
Employees in roles requiring frequent travel, such as carers visiting clients, sales representatives, or field engineers, will see the most benefit. To claim the allowance, workers typically submit expense reports to their employers, who then reimburse them tax-free up to the approved rate.
Martin Lewis, founder of MoneySavingExpert, welcomed the change, stating: “The increase from 45p to 55p for the first 10,000 miles is really important. This has been frozen since 2011, so it’s a long-overdue adjustment.”
Andrea Egan, General Secretary of Unison, added: “This simple measure will provide immediate help for countless frontline workers in public services, especially with living costs rising. Unison has campaigned hard for this change, and we’re glad the Chancellor listened.”
The new rates take effect immediately, providing a timely financial boost for millions of workers across the UK.
