Millions of UK drivers could claim more for mileage expenses under major review
Millions of drivers could soon be making more claims for their mileage expenses as the government launches a “workers first” review.
Treasury secretary Dan Tomlinson said the review of the 45p per mile rate was “long overdue”.
He acknowledged that this recession, which has remained unchanged since 2011, has increased the “cost of working.”
Chancellor Rachel Reeves announced the review this month and the Treasury offered further details. The government plans to consult with workers facing rising vehicle costs throughout the process.
Finance Minister Mr Tomlinson said: “Millions of workers rely on their cars to do their jobs.
“However, mileage rates have not changed since 2011, increasing the cost of operation. A review is long overdue.”
“Keeping pump prices low is an important way we can help people’s cost of living, which is why fuel duty is already frozen.”
The approved mileage allowance payment defines how much tax-free reimbursement can be given to employees who use their own cars for business.
Drivers can currently claim 45p per mile duty-free for the first 10,000 miles, which is expected to cover the operation of a vehicle, including insurance and servicing.
After that drivers can claim 25p per mile. An additional 5p per mile may be charged for each passenger carried.
The “workers-first investigation” will focus on people who rely on the car to do their jobs, officials said.
Any changes to the rate will be announced in a future budget.
Unison general secretary Andrea Egan said: “This review is long overdue. Many workers have paid a heavy price for simply keeping their jobs due to frozen tariffs.”
“For people who provide essential public services and need their own car to work, this has taken thousands of pounds out of their pocket.
“It’s good news that the Chancellor is listening and moving in the right direction. Especially as household bills are rising again.”
The Government is under pressure to do more to help motorists as fuel prices soar in response to the oil and gas crisis triggered by the war in Iran.
Diesel prices have increased by almost a quarter since the beginning of the conflict in the Middle East.
The RAC said the average price of a liter of fuel in the UK reached 175.7p on Wednesday, a 23% increase since February 28, when the US-Israeli bombing campaign against Iran began.
Average petrol prices rose 13% from 132.8p to 149.4p.
The Conservatives have stepped up the campaign to persuade Ms Reeves to cancel a fuel duty increase due in September.
