Martin Lewis has updated drivers on a new 55p per mile rule, describing it as a 'big one' that will put more money in motorists' pockets. The money expert has welcomed the move by the Government, which increases the mileage allowance for those who use their personal cars for work purposes.
New Mileage Rates Announced
Chancellor Rachel Reeves has announced new rates for the mileage allowance, increasing it from 45p to 55p per mile. This allowance helps cover costs for drivers who need to use their personal vehicles for business reasons. It does not cover commuting to and from work, but applies to journeys made as part of a job, such as a carer visiting different homes.
The new 55p rate applies to the first 10,000 miles driven in a tax year in a car or van. After 10,000 miles, the rate drops to 25p per mile.
How to Claim
Workers can claim these expenses directly from their employer or claim tax relief from HMRC. Typically, employees must submit expense claims to their employers. If an employer pays less than the full rate, the worker can claim tax relief on the difference.
Martin Lewis's Reaction
Money expert Martin Lewis welcomed the change, stating: "The big one that I think is going to be under-covered, but is actually really important, is the increase in the mileage allowance for people who drive as part of their work. This has been frozen at 45p since, I think 2011, so the increase from 45p to 55p for the first 10,000 miles that you drive is really important."
Union Support
Unison general secretary Andrea Egan also praised the move, saying: "This simple measure will provide immediate help for countless frontline workers in public services. Particularly at a time when living costs are going through the roof once again. People who need their own cars for work have been left thousands of pounds out of pocket for far too many years. Unison has campaigned hard for this long overdue change. It's good to know the Chancellor has listened to the concerns of staff penalised by frozen rates."
The increase is expected to benefit many drivers who rely on their cars for work, providing much-needed financial relief amidst rising living costs.
