Martin Lewis reacts as Rachel Reeves launches | Tech News
Martin Lewis has reacted to an “important” new Rachel Reeves car tax change launched this May, with the Money Saving Expert warning that the replace might have slipped beneath the radar. Earlier this week, the Chancellor confirmed a 10p per mile increase in tax-free mileage charges which had been backdated to April 2026.
It signifies that the permitted mileage allowance fee for petrol and diesel drivers will go up from 45p per mile to 55p per mile, the primary change in charges since 2011. The Treasury defined that the transfer would benefit those that need to drive for work, suggesting that the plan might save drivers up to £120 for a employee travelling 6,000 business miles utilizing their own vehicle.
Speaking on BBC Radio 5 Live, Martin stated: “The big one that I think is going to be under-covered, but is actually really important, is the increase in the mileage allowance for people who drive as part of their work.
“This has been frozen at 45p since, I think 2011, so the increase from 45p to 55p for the first 10,000 miles that you drive is really important.”
Martin added: “This mileage allowance is the quantity that your employer can provide you to cowl your prices, and you do not pay tax and National Insurance on it. So it does not rely as earned money. It’s a particular allowance. So shifting that from 45p to 55p is important.”
Previous calculations by Dr Tim Chatterton on the RAC Foundation from 2023 urged that people who drove their own automobiles needs to be entitled to about 63p per mile tax-free.
After the Chancellor’s announcement, Steve Gooding, director of the RAC Foundation, backed the new plan.
He stated: “The Chancellor’s announcement is good news, particularly for those on lower incomes who are nevertheless required to use their own vehicles in the course of their jobs.
“Our analysis revealed the difference that had grown between the rising real costs such workers are facing driving for work and the allowable mileage rate, and although a gap remains it will be a relief to see it substantially diminished.”
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