UK mileage allowance changes: what drivers need to know

UK mileage allowance changes explained

Using your own car for work can come with extra costs, from fuel and maintenance to wear and tear on your vehicle. For drivers who regularly travel long distances, keeping track of these expenses can make a real difference to their monthly budget. 

With changes to the UK mileage allowance rates now announced, it's worth understanding what they mean for drivers and how to make sure you're keeping on top of your motoring costs.

What's changing with the mileage allowance rates?

Ahead of the Autumn Budget, the government has confirmed changes to tax-free mileage rates for people who use their own car for work. The 55p rate for the first 10,000 business miles will be made permanent, while the rate for every mile after that will rise from 25p to 35p.

How could the changes affect drivers?

For people who regularly use their own car for work, this should provide some welcome support towards the cost of fuel and wider running costs, particularly for higher-mileage drivers. 

Drivers should check how much their employer reimburses them for business mileage, as this may be less than the government-approved rate. If you're paid less, you may be able to claim tax relief from HMRC on the difference, so it's important to keep an accurate record of your business journeys and mileage throughout the year.

Don't forget other motoring costs

For those who do regularly travel for work, it's also worth keeping an eye on your wider vehicle costs. Fuel, servicing, insurance and maintenance can all add up alongside higher mileage, so factoring these into your monthly budget can give you a much clearer picture of what your car is costing you.

 

Whatever the distance you travel for work, keeping accurate records and reviewing your vehicle expenses can help you understand where your money goes. Checking your mileage reimbursement and planning for ongoing maintenance costs can also help you budget more confidently.