After more than a decade of standing still, mileage rates for business travel are finally under review—raising hopes for relief among workers who rely on their cars every day.
The government has confirmed it will reassess approved mileage allowance payment rates ahead of a future Budget, acknowledging that the current system no longer reflects the true cost of driving for work.
The rates, unchanged since 2011, have failed to keep pace with rising fuel prices, insurance premiums and vehicle maintenance costs. For many employees and self-employed workers, that gap has quietly grown—leaving them increasingly out of pocket simply for doing their job.
Chancellor Rachel Reeves recently highlighted the issue, noting how significantly motoring costs have shifted over the past decade. The planned review, described as “workers-first,” will focus on those most affected—particularly individuals who depend on their vehicles as an essential part of their work.
As part of the process, the government has said it will engage directly with workers facing higher costs, using their experiences to shape any potential changes.
While the review is underway, ministers point to broader efforts to ease financial pressure. Fuel duty remains frozen until September, a move intended to keep prices down at the pump and offer some immediate support.
Dan Tomlinson, Exchequer Secretary to the Treasury, said millions of workers rely on their cars but have seen the cost of doing so steadily increase as mileage rates remained unchanged. He described the review as “long overdue.”
For now, no immediate changes have been announced—but the direction of travel is clear. After years of rising costs and static allowances, the question is no longer whether mileage rates need updating, but how far they will go to catch up.
