27th October 2026
Mileage payments, carers' benefits, paternity pay and fuel duty are among the changes announced ahead of the Budget. But who will benefit, and how much difference will they make?
The Government has unveiled a series of practical measures ahead of the Budget on Wednesday 28 October, covering working expenses, unpaid carers, new parents and everyday services.
They may not have the scale of a major tax or spending reform, but they address problems that can have a direct effect on household finances. A change to the rules governing Carer's Allowance could help people who have been reluctant to take on extra work, while higher mileage rates could provide some relief for workers who use their own vehicles for their jobs.
There is also a potentially important announcement for motorists. A further freeze in fuel duty, alongside the continuation of the 5p-a-litre discount, has been reported ahead of the Budget. However, those fuel-duty measures should be treated as expected rather than confirmed until the Chancellor formally announces them.
Higher mileage rates for people who drive for work
The Government intends to make the higher tax-free mileage rates permanent, supporting employees and self-employed people who use their own vehicles for business journeys.
The rate for the first 10,000 business miles is 55p per mile, while the rate for mileage above that threshold is to rise from 25p to 35p.
The 55p rate has already been introduced for the 2026–27 tax year, following an increase from 45p. The latest announcement is intended to secure the higher rate for the future and improve the allowance for people driving substantial distances.
The Government estimates that around three million employees and self-employed people could benefit. Someone driving 6,000 business miles a year could receive up to £120 in additional tax savings, while someone covering 15,000 business miles could benefit by up to £300.
There is an important distinction, however. The mileage rate is the amount an employer can reimburse tax-free, rather than a compulsory payment that every employer must make. Workers who receive less may be eligible to claim tax relief on the difference, subject to the rules.
The change is particularly relevant to nurses, care workers, tradespeople and other employees who travel between workplaces or visit customers. In rural Scotland, where distances are often considerable, the costs of using a personal vehicle can be especially significant.
The higher rate recognises that business motoring involves more than the cost of fuel. Servicing, tyres, repairs and depreciation also contribute to the expense.
A change to Carer's Allowance
One of the most significant measures concerns unpaid carers who receive Carer's Allowance.
Under the existing system, a carer who earns even a small amount above the permitted weekly earnings limit can lose the entire allowance. That creates a financial cliff edge: working an additional shift or accepting a modest pay rise can leave someone worse off.
The Government plans to replace this arrangement with a tapered system. Instead of losing the whole allowance when earnings exceed the limit, the payment would reduce by £1 for every additional £1 earned above the threshold.
This is intended to remove the incentive to turn down work simply to remain within the rules.
For carers already balancing paid employment with looking after a relative or friend, the change could provide greater flexibility. It could also reduce the risk of overpayments accumulating when someone inadvertently exceeds the earnings limit.
However, the reform will require changes to the administration of the benefit. It should not be assumed that the new system will be available immediately. The detailed implementation timetable and final arrangements will matter to carers who are currently making decisions about their working hours.
The principle is straightforward: people should not automatically lose all their support because their earnings rise by a small amount.
Support for self-employed fathers
The Government also plans to extend two weeks of parental pay to eligible self-employed fathers and partners who have previously been excluded from this support.
The payments are currently described as worth up to £194 a week, giving eligible parents financial help during the first weeks after a child's birth.
This addresses a longstanding difference between the position of employed and self-employed parents. Someone working for themselves may have greater flexibility over when they work, but time away from a business can mean losing income or missing opportunities.
For a self-employed tradesperson, shopkeeper or small-business owner, two weeks away from work can carry a financial cost. The new support could make it easier to spend time with a newborn without bearing the entire loss of income.
The Government says the wider parental-pay changes will extend support to more than 150,000 additional parents each year.
Eligibility rules and the precise arrangements will be important. The announcement should not be interpreted as an unconditional payment to every self-employed father.
Nevertheless, recognising that self-employed people also need time to care for a new child is a practical change to the support system.
More Post Office parcel drop boxes
Another announcement may appear relatively minor, but could make everyday tasks easier.
The Government plans to expand the network of Post Office self-service parcel drop boxes, with 500 expected to be installed by the end of 2026 and 1,000 in place by the end of the financial year. It also plans upgrades to 600 Post Office branches.
The boxes are intended to make sending and returning parcels easier without requiring customers to queue at a counter.
This could be useful during the Christmas shopping period, when parcel volumes increase. It may also help online sellers and people returning unwanted purchases.
The practical benefit will depend on where the boxes are installed, what parcel services they support and whether they are accessible to people who cannot easily travel to a Post Office.
For smaller communities, the location of the facilities will be particularly important. A national target of 1,000 boxes will be less meaningful to a rural household if the nearest one is many miles away.
Fuel duty: relief for motorists?
Motorists are also awaiting the Budget decision on fuel duty.
The 5p-a-litre reduction was originally introduced in 2022 as a temporary response to rising fuel prices. It has been extended repeatedly since then.
Ahead of the Budget, reports indicated that the Government was expected to freeze fuel duty again and continue the 5p discount. If confirmed, this would prevent a planned increase in the tax burden on petrol and diesel.
A freeze would not necessarily make fuel cheaper. It would mean avoiding an increase that might otherwise have taken place, while the existing discount would continue to reduce the duty charged compared with the rate without that reduction.
The distinction matters because motorists are facing pressures beyond taxation. International oil prices, refining costs, distribution expenses and retailer margins all influence the price displayed on forecourts.
For people in rural areas of Scotland, where driving is often essential for work, shopping and medical appointments, avoiding a fuel-duty increase could still be significant. Businesses that depend on vehicles could benefit too.
But the final outcome will depend on the Chancellor's formal announcement and on what happens to wholesale fuel prices.
Small changes, but what is the overall effect?
These announcements share a common feature: they attempt to remove specific financial obstacles rather than redesign entire systems.
Higher mileage rates recognise the cost of using a personal vehicle for work. A tapered Carer's Allowance would remove a disincentive to earning more. Support for self-employed parents acknowledges the financial consequences of taking time away from work. Parcel drop boxes aim to make a routine service more convenient.
The fuel-duty proposals, if confirmed, would address another immediate pressure on household budgets.
Individually, the benefits may be modest or apply only to particular groups. They will not resolve the wider problems of rising living costs, strained public finances or pressure on public services.
The real test will be how the measures work in practice: whether carers can increase their earnings without losing support, whether eligible self-employed parents can access payments easily, and whether the higher mileage rates are reflected in what workers receive.
The announcements offer some practical help, but the wider Budget will still need to address the difficult balance between public spending, taxation, economic growth and the cost of living.