HMRC mileage rates are under review

The UK government has signalled a review of mileage allowance rates, a move that could bring financial relief to millions of workers who rely on their vehicles for business travel.

The review will examine whether current approved mileage allowance payment (AMAP) rates still reflect the real cost of driving. These rates have remained unchanged since 2011, despite significant shifts in fuel prices, vehicle costs, and overall living expenses.

For many employees, particularly those in sectors such as healthcare, social care, and field services, using a personal vehicle is essential to their role. However, outdated mileage rates have increasingly meant that workers are effectively subsidising business travel out of their own pockets.

The government intends to engage directly with affected workers and stakeholders as part of the review process. The aim is to ensure that reimbursement rates better align with modern driving costs and support those most impacted.

While no immediate changes have been confirmed, the review marks an important step toward fairer compensation for work-related travel. Businesses and employees alike should keep a close eye on updates, as any adjustments could have implications for expense policies and payroll practices.

What should businesses do now?

Employers may want to assess their current mileage reimbursement policies and consider whether they remain competitive and fair in the current economic climate.

Need guidance on mileage rates or expense policies? Get in touch with the Verallo team today.