The Government has announced a 10p increase in the amount of tax relief available to drivers who use their own vehicles for business travel.
Since 6 April 2011, the mileage allowance has been set at 45p per mile for the first 10,000 business miles. Following sustained calls by trade unions for an increase, the Government has now confirmed this rate will rise by 10p per mile for the first 10,000 miles, bringing it to 55p per mile. All other mileage rates will remain unchanged.
The revised rate is being backdated to 6 April 2026.
Where an employer reimburses an employee for the use of their own car on business journeys, the mileage allowance determines the amount that can be paid free of tax. If an employer does not reimburse the employee, or reimburses at a lower rate, the employee may claim tax relief on the difference.