People using cars for work face ‘important change’ | Tech News

The allowance has been elevated by 10p for the primary time in years, now permitting people to say tax aid on up to 55p back for the primary 10,000 miles that they drive. However, that is solely for people who use their car for work and that doesn’t embody travelling to or from their place of work.

Martin Lewis shared his issues that this replace can be “under-covered” however assured people it’s “actually really important”.

Speaking on BBC Radio 5 Live with Adrian Chiles, Martin shared: “It is also worth noting, if your employer doesn’t give you the full amount of the mileage allowance – let’s imagine they give you 30p (and the allowance is 55p) – you can claim tax back on that 25p per mile that you drive as part of your work (not commuting).

“[In other words], you can get the tax back on the difference between what your employer gives you and the full allowance. And if they didn’t give you anything, you could claim [tax back on] the full 55p.

“This has long been a complaint I’ve got, so I think the change from 45p a mile to 55p a mile backdated to April 2026, so backdated a couple of months, is really going to be quite useful for people. It’s only for the first 10,000 miles, there’s a lower rate after that.”

The Approved Mileage Allowance Payment is for people who use their own individual car, not a company car for business-related journey. It permits their employer to cowl some of their price per mile for these business journeys and declare some tax aid.

For instance in the event that they drive from their common office to go to a shopper, journey between places of work to attend conferences or run business errands like selecting up provides. It additionally applies to people who’re self-employed.

Your common commute into work isn’t included on this, in addition to any personal journey you do within the vehicle equivalent to working errands or doing non-work-related duties.

For more than a decade, the cost has been 45p per mile nevertheless it has now been elevated to 55p. This may even be backdated to April 2026 however it’ll solely be for the primary 10,000 miles the individual drives. After they hit 10,000 miles, this can drop to 25p per mile.

The cost itself doesn’t rely as ‘earned money’ so that you additionally received’t pay National Insurance or tax on the cost. The 10p uplift will solely apply to cars and vans. Motorbikes and bicycles have a flat charge of 24p and 20p respectively regardless of the mileage.

If you employ a company car moderately than your own personal vehicle, there may be a completely different aid you possibly can declare which follows the Advisory Fuel Rates. This assures you might be compensated for the fee of fueling the vehicle solely whereas the mileage allowance additionally considers the fee of working it.