Martin Lewis has welcomed a boost for drivers who use their own cars or vans for work, saying that it is a "really important" change. After a freeze for years, there has been an increase in mileage allowance which can benefit employees and self-employed workers.
Those who use their own vehicles in their job can claim more towards their costs. The allowance does not cover normal commuting to and from work but applies to the likes of care workers travelling between clients or anyone who needs to visit different locations as part of their job, as The Express reports.
Increase from 45p to 55p per mile
Mr Lewis, founder of the MoneySavingExpert website, was speaking on BBC Radio 5 Live when he highlighted the issue. It follows the confirmation from the Government that the approved mileage allowance for cars and vans will rise from 45p to 55p per mile for the first 10,000 business miles driven each tax year.
The change applies from April 6 of this year. Mr Lewis said: "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." He said that employers can reimburse workers up to the approved mileage rate without the payment being subject to tax or National Insurance.
Claiming tax back if employer pays less
Mr Lewis added that drivers still could be entitled to tax relief if their employer pays less than the approved rate. He said: "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)."
And he said that if employers did not give them anything, then workers could claim tax back on the full 55p. After the first 10,000 business miles, the approved mileage rate for cars and vans falls to 25p per mile.
Self-employed and other vehicles
The change also applies to self-employed workers who use their own vehicles for business. Mileage rates for motorbikes and bicycles, however, remain unchanged at 24p and 20p per mile respectively.
