24th May 2026
The main change just announced in the UK tax system is a rise in the tax-free mileage allowance for people using their own vehicle for work journeys.
From the 2026/27 tax year:
The Approved Mileage Allowance Payment (AMAP) rate rises from 45p to 55p per mile for the first 10,000 business miles.
The rate above 10,000 miles stays at 25p per mile.
The change is being backdated to 6 April 2026.
This is significant because the 45p rate had effectively been frozen since 2011, despite rising fuel, insurance, servicing and vehicle costs.
Reddit and contractor forums have been full of comments from workers saying the old rate no longer reflected real costs.
The allowance applies when employees or self-employed people use their own cars for business travel — not ordinary commuting. If your employer pays less than the HMRC approved rate, you can usually claim tax relief on the difference.
Separately, HMRC has also updated its Advisory Fuel Rates for company cars from March 2026:
Vehicle type New rate
Petrol unchanged
Diesel unchanged
LPG reduced slightly
Electric home charging remains 7p per mile
Electric public charging
rises from 14p to 15p per mile
These advisory rates are mainly for employees driving company cars, not their own vehicles.
For many workers — especially sales reps, care workers, engineers and rural staff covering large distances — the 55p rise could mean hundreds or even thousands of pounds more in tax-free reimbursement each year.