Rachel Reeves rubber stamps 20p per mile fee for commuters who cycle to work
Chancellor Rachel Reeves has confirmed the cycle to work mileage rate will remain at 20p per mile, as part of her Great British Summer Savings Scheme — while car mileage tax relief rises
Rachel Reeves confirms 20p per mile charge for people who cycle to work
Rachel Reeves has announced a 20p per mile rate for people who cycle to work. The Labour Party Chancellor has unveiled her Great British Summer Savings Scheme in the Commons this week, featuring revised mileage rates.
If you need to use your car for work in the UK (not simply just for commuting to or from work) you’ll now be able to claim tax relief on 55p per mile for the first 10,000 miles driven in the tax year. This represents a 10p increase from 45p per mile.
However, the rate for bicycles – which stands at 20p for those covering under 10,000 miles and 20p for those exceeding 10,000 miles – will remain unchanged.
If you drive as part of your job, for instance you’re a care worker travelling from house-to-house, your employer can reimburse your costs per mile through what’s termed an “Approved Mileage Allowance Payment”, on which you pay neither tax nor National Insurance, reports Birmingham Live. Reacting to the wide-ranging changes, Fiona Eastwood, Chief Executive Officer of Merlin Entertainments said: “This is great news for the UK’s visitor economy and for families planning trips this summer.
“As the season gets underway, this timely move from the Government will make it easier for people to get out, explore and create memorable moments together at destinations across the country. Merlin will be applying this VAT cut to both admission tickets and children’s meals, adding more value to days out and short breaks at our 20 UK attractions.
“We’re excited to welcome more families to our resort theme parks and immersive experiences for a summer packed with fun, play and lasting memories.” Activities where no VAT is charged (e.g. because these benefit from exemptions or zero-rating) aren’t in scope, including activities under the cultural exemption, such as admission to not-for-profit museums, zoos or theatres.
Reeves has announced a new package of support aimed at easing pressure on households and key workers this summer.
The “Great British Summer Savings Scheme” was unveiled on Thursday (May 21), as part of a wider Government response to rising living costs, which ministers say have been driven higher by global economic disruption linked to the war in Iran.
A central plank of the plan is help with travel costs for workers, including the first increase in tax-free mileage allowances since 2011.
The Approved Mileage Allowance Payment (AMAP) means eligible workers can claim the higher rate for business journeys already made this tax year.
Moreover, the Treasury argues the car mileage rise will particularly benefit lower-paid, car-reliant workers such as care staff who often have to travel between clients.
Alongside this, the existing fuel duty cut has been extended until the end of 2026 in a move designed to keep pump prices down for motorists.
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