UK to review 45p tax-free mileage rate, possibly increasing to 67p due to rising vehicle costs.

Chancellor Rachel Reeves has confirmed the UK government is reviewing the tax-free mileage rate of 45p per mile, unchanged since 2011, due to rising fuel, insurance, and vehicle costs. The review, prompted by concerns over financial strain on workers like social workers and carers, could lead to an increase, with estimates suggesting a rate closer to 67p per mile may better reflect current expenses. While employers may offer higher reimbursements, amounts above the approved rate could be taxable. The change is expected as part of a future fiscal event, aiming to address the cost-of-living crisis and ensure fair compensation for work-related travel.