🚗 BIG NEWS FOR EMPLOYEES & BUSINESS OWNERS 🚗

The Chancellor has announced that the tax-free mileage allowance has increased by 10p per mile to 55p per mile 👏

Even better?✅ The increase can be backdated to 6 April 2026.

For years, the approved mileage allowance sat at 45p per mile for the first 10,000 business miles, despite rising fuel, insurance and vehicle costs.

This increase is a welcome boost for employees and directors using their own car for business journeys.

💷 Worked example:

An employee drives 8,000 business miles in a tax year.

Old rate at 45p:8,000 × £0.45 = £3,600 tax-free reimbursement

New rate at 55p:8,000 × £0.55 = £4,400 tax-free reimbursement

🎉 Additional tax-free amount:£800 per year

That’s an extra £800 that can now potentially be paid tax-free by the employer.

For companies already reimbursing at 45p, it may also be worth reviewing whether a backdated top-up payment can be made from 6 April 2026.

A rare piece of tax news that will actually make a lot of people happy.

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