Chancellor Rachel Reeves has confirmed a 20p per mile charge for individuals who cycle to work. The Labour Party Chancellor unveiled her Great British Summer Savings Scheme in the Commons this week, which includes updated mileage rates.
New Mileage Rates for Cars and Bicycles
Under the new scheme, employees who use their car for work purposes—excluding commuting to and from their usual workplace—can claim tax relief on 55p per mile for the first 10,000 miles driven in the tax year. This represents a 10p increase from the previous rate of 45p per mile.
However, the mileage rate for bicycles remains unchanged at 20p per mile for both those cycling under 10,000 miles and those exceeding 10,000 miles annually.
Approved Mileage Allowance Payments
For workers who drive as part of their job, such as care workers traveling between homes, employers can cover costs per mile through an Approved Mileage Allowance Payment. This payment is exempt from both tax and National Insurance contributions.
Reactions from Industry Leaders
Fiona Eastwood, Chief Executive Officer of Merlin Entertainments, responded positively to the changes. She stated: "This is great news for the UK’s visitor economy and for families planning trips this summer. As the season gets underway, this timely move from the Government will make it easier for people to get out, explore and create memorable moments together at destinations across the country."
Merlin Entertainments plans to apply the VAT cut to both admission tickets and children’s meals, adding value to days out and short breaks at its 20 UK attractions. However, activities where no VAT is charged—such as those benefiting from exemptions or zero-rating, including admission to not-for-profit museums, zoos, or theatres—are not included in this scope.
