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Rachel Reeves Considering Major Update on Mileage Rates for Workers
The government plans a new pay-per-mile charge on electric and hybrid vehicles from 2028 while considering raising the 45p tax-free mileage rate frozen for 15 years.
- This past week, Chancellor Rachel Reeves told MPs she is considering increasing the minimum tax-free mileage reimbursement and said changes could appear in a future fiscal event.
- Reeves noted that motoring costs have risen significantly in recent years, while the 45p-per-mile rate was last updated 15 years ago, leaving workers like Gemma paying over 10,000 pounds annually.
- Under current rules, the Approved Mileage Allowance Payment lets drivers claim 45p per mile for the first 10,000 miles, 25p thereafter, plus 5p per passenger, while the RAC Foundation says millions lose thousands yearly.
- On employers, ministers note that companies may choose to pay higher reimbursements, but such top-ups could be subject to income tax, affecting take-home pay and employer costs, according to Unison assistant general secretary Jon Richards.
- The wider policy package includes a new pay-per-mile levy called eVED for electric vehicles and plug-in hybrids, and ministers argue it balances worker reimbursements with broader tax fairness.
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The Independent (US)
The Independent (US)Reeves says she might raise mileage rates for drivers using cars for work
The Chancellor said the potential change would be in response to a ‘significant’ rise in driving costs. Drivers may be able to claim back more in expenses for mileage, after Rachel Reeves said she was considering increasing the minimum tax-free amount. The Chancellor said she understood driving costs had risen “significantly” in recent years, as the current rate of 45p-per-mile was last updated 15 years ago. The Approved Mileage Allowance Paymen…
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Leaning Left2Leaning Right0Center8Last UpdatedBias Distribution80% Center
Bias Distribution
- 80% of the sources are Center
80% Center
L 20%
C 80%
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