27th October 2026
Higher mileage rates are welcome news for volunteer drivers, but charities need the funding to pay them
Volunteers are often described as the backbone of the charity sector. They drive older people to hospital appointments, deliver food parcels, support community transport schemes and help keep local services running. Yet many volunteers use their own cars and may receive less in mileage expenses than the cost of running their vehicles.
The Government's latest pre-Budget announcement on mileage rates raises an important question. If the approved rates increase, will charities be able to afford to reimburse their volunteers properly, or will the financial pressure simply be transferred to the people giving their time freely?
The issue is particularly relevant in Scotland, where rural communities often depend on volunteer drivers because public transport is limited and journeys can be long.
A welcome change, but a funding problem
The Government has announced plans to retain the tax-free mileage rate of 55p per mile for the first 10,000 qualifying miles and increase the rate for additional miles from 25p to 35p.
The 55p rate has already been introduced for 2026-27, following a long period in which the previous 45p rate had remained unchanged. The proposed increase for higher-mileage drivers is another change that organisations will need to consider.
For charities, however, a higher approved rate does not automatically bring extra money into the bank.
Many charities operate on restricted grants, donations and contracts that have to cover staff, buildings, insurance, equipment and the delivery of services. Some grants and budgets for 2026-27 were agreed before the 55p rate was announced, leaving organisations facing higher potential expenses without additional funding.
The Scottish Council for Voluntary Organisations (SCVO) has highlighted precisely this problem, calling for Government and local authority funding arrangements to recognise the higher mileage costs faced by voluntary organisations.
Volunteer Scotland has also warned that charities could face a difficult choice: find the additional money themselves or leave volunteers out of pocket.
Volunteers are not employees
There is an important difference between mileage payments to employees and the reimbursement of volunteers' expenses.
Volunteers are not normally paid for their time. However, that should not mean they have to subsidise the charity through the cost of carrying out their duties.
A volunteer who drives their own car to take someone to a hospital appointment incurs real costs. Fuel is only one part of the expense. Insurance, servicing, tyres, depreciation and repairs also contribute to the cost of each mile travelled.
HMRC's approved mileage rates provide a recognised way of reimbursing such journeys. Charities can use those rates or reimburse the actual costs incurred where the volunteer can provide appropriate evidence. The amount a charity chooses to reimburse remains a decision for the organisation.
The problem arises when a charity can afford to pay only 30p or 40p per mile, for example, while the approved rate is 55p. The volunteer may be left meeting the difference personally.
Some volunteers will willingly accept that arrangement because they believe strongly in the service they support. Others may simply be unable to afford it.
That creates an uncomfortable situation in which a person giving their time freely is also expected to contribute financially.
The impact on rural Scotland
The issue is especially significant in places such as Caithness and Sutherland.
A volunteer driver may collect an older person from a remote village, take them to a hospital appointment and return them home. The journey could cover many miles, while the passenger may have no practical alternative.
Community transport schemes can also help people who cannot easily use conventional buses because of disability, mobility difficulties or the location of their homes.
Similar pressures affect volunteers delivering food, supporting local groups, transporting people to activities and helping charities reach isolated communities.
If reimbursement rates remain below the cost of running a vehicle, some volunteers may decide that they can no longer afford to continue. Others may reduce the journeys they undertake.
The consequences could extend beyond the volunteers themselves. Charities might have to reduce the number of appointments they support, restrict their geographical coverage or spend more time trying to recruit drivers.
The people most affected could be those who already have the fewest alternatives.
A simple example illustrates the problem
Consider a volunteer who drives 2,000 miles a year on behalf of a charity.
At 55p per mile, reimbursing those journeys would cost £1,100 annually. At 40p per mile, the cost would be £800, leaving a difference of £300.
That might appear modest when considered across a whole year. But for someone on a limited income, it is money that could otherwise help pay household bills.
For a charity with 50 volunteer drivers each covering the same distance, moving from 40p to 55p per mile would add £15,000 to annual expenses.
The calculation demonstrates both sides of the problem. The additional reimbursement can make a genuine difference to volunteers, but the charity must find the money somewhere.
Who should pay?
Charities cannot simply be expected to absorb every increase in operating costs without additional support.
If central or devolved government departments, councils or health boards commission voluntary organisations to provide services, the funding arrangements need to recognise the real cost of delivery. Mileage is part of that cost, just as staffing, insurance and equipment are.
Grant-making bodies also need to consider whether their awards allow charities to reimburse volunteers at a reasonable rate. Existing agreements may need to be reviewed when substantial changes occur after budgets have been set.
The UK Government should explain how the higher mileage rates will affect publicly funded voluntary services. The Scottish Government and local authorities also have a role where they fund charities or commission community services.
There is a wider question about the value placed on volunteering. Charities save public money by providing support that might otherwise have to be delivered through more expensive services. If volunteers are discouraged from participating because they cannot afford their travel costs, that apparent saving could prove short-sighted.
Volunteers should not become the hidden subsidy
Nobody expects volunteers to be paid a wage simply for giving their time. But there is a strong argument that they should not have to pay for the privilege of helping others.
Some volunteers may choose not to claim every penny of their expenses. That is their decision. It should not become an expectation built into a charity's finances.
Nor should charities be criticised automatically for paying less than the approved rate when they genuinely lack the resources to do otherwise. The funding system itself needs to be examined.
The Budget therefore presents an opportunity to address a problem that extends beyond the headline mileage figures. If the Government wants charities and community groups to continue delivering valuable services, it must consider the financial consequences of its decisions for the organisations doing that work.
A higher mileage rate is welcome only if volunteers can benefit from it. Without adequate funding, the risk is that the cost of supporting vulnerable people will quietly fall on the volunteers themselves.