HMRC confirms major mileage tax change impacting millions for first time

1 sources1 storiesFirst seen 7/4/2026Score22Breakthrough

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HMRC has unveiled a new mileage allowance as part of a wider package of tax changes aimed at cutting costs for working people.

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The changes announced by Chancellor Rachel Reeves have increased the tax-free mileage rate for the first time in 15 years, with up to three million workers set to benefit.

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The Government said the measure will save someone driving 6,000 business miles more than £120 a year, and that it has been backdated to April 6, 2026.

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The approved mileage rate for cars and vans has risen from 45p to 55p per mile for the first 10,000 business miles, while the rate for any mileage above that remains 25p.

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TRENDING Stories Videos Your Say The announcement forms part of a broader package of cost-of-living support unveiled by the Treasury to help families and workers over the summer.Speaking to GB News, Lee Murphy, managing director at The Accountancy Partnership, said the change was long overdue after years of rising motoring costs.

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