10P RISE IN TAX FREE MILEAGE RATE.

.With soaring petrol and diesel prices, the chancellor announced a 10p per mile increase in tax-free mileage rates with the hike backdated to 6 April 2026, ‘benefiting those who need to drive for work, from care workers to plumbers’.

This means an increase from the current 45p for cars and vans to 55p per mile for the first 10,000 business miles in the tax year, and 25p for mileage over 10,000 miles. There will be no change to the motorcycle rate. HMRC has updated the rates page stating the new approved mileage rates are ‘approved from tax year 2026 to 2027’.

This is the first increase in the approved mileage rate for 15 years with the rate frozen since April 2011.