Change comes following RAC Foundation analysis
The chancellor has raised the tax-free mileage rate that workers using their own car for business can claim.
The approved mileage allowance payment (AMAP) will go up from 45p per mile to 55p per mile, backdated to April 2026.
The rate hadn’t previously changed since 2011.
Speaking in parliament today Rachel Reeves said:
“I can today announce a 10p per mile increase in tax free mileage rates, backdated to April 2026; benefiting those who need to drive for work, from care workers to plumbers.”
The move comes following pressure from the trade union Unison and Jim McMahon MP who relied on analysis from the RAC Foundation.
Steve Gooding, director of the RAC Foundation, said:
“The Chancellor’s announcement is good news particularly for those on lower incomes who are nevertheless required to use their own vehicles in the course of their jobs. Our analysis revealed the difference that had grown between the rising real costs such workers are facing driving for work and the allowable mileage rate, and although a gap remains it will be a relief to see it substantially diminished.”
ENDS
Contacts:
Philip Gomm – Head of External Communications – RAC Foundation
[email protected] | 07711 776448
Notes to editors:
The RAC Foundation is a transport policy and research organisation which explores the economic, mobility, safety and environmental issues relating to roads and their users.
It is a registered charity. Charity number: 1002705.
The Foundation publishes independent and authoritative research with which it promotes informed debate and advocates policy in the interest of the responsible motorist. For more information visit www.racfoundation.org