The Government has announced five "everyday fixes" ahead of Wednesday's Budget, including permanently fixing the 55p per mile work rate for the first 10,000 miles. The measure is expected to benefit approximately three million employees and self-employed workers.
The Chancellor and Prime Minister have revealed that a higher tax-free mileage allowance will be made permanent, while tariffs on a range of food products will be reduced to lower prices for consumers. This forms part of a wider package aimed at alleviating the ongoing financial pressures facing the public.
Mileage rates and thresholds
For work-related driving, the 55p rate will apply to the first 10,000 miles. For distances beyond that threshold, the rate will increase from 25p to 35p. The Treasury estimates the combined measures are worth £120 a year in "additional tax savings" for a worker covering 6,000 business miles, rising to £300 for those driving 15,000 business miles, compared to rates prior to April 2026.
Motorcycle rates remain unchanged at 24p per mile, and bike rates stay at 20p per mile. The 55p rate for cars and vans is being made "permanent," with the above-10,000-mile rate rising to 35p per mile from 6 April 2027.
Broader package of measures
The Government is also scrapping tariffs on over 100 products, including popular foods such as baked beans, chocolate and gherkins. According to the Treasury, this will save households approximately £21 on their annual food shopping bill. Tariff reductions on fertilisers are designed to benefit farmers, while a tariff cut on kerosene will assist households that rely on the fuel for heating.
Ministers also intend to extend parental pay to more than 150,000 parents annually, including self-employed fathers who were previously excluded. A cliff edge on carer's allowance will be ended, with the Government instead tapering away £1 of the benefit for every £1 earned above the weekly limit.
Additional announcements
The Government is introducing hundreds of extra Post Office drop boxes, aiming to reduce queuing times at counters for sending and returning parcels, particularly during the busy Christmas period. Prime Minister Mr Burnham stated: "We are taking on the big challenges facing the country. But that doesn't mean losing sight of the everyday problems that cost people money or simply aren't fair."
"If you're a nurse driving for work, a parent spending those precious first weeks with your new baby, or an unpaid carer picking up an extra shift, these changes will make life a little easier and put more money back in your pocket."
He added: "And at Wednesday's Budget, we'll go further to give families and businesses the breathing space they need today, while we build a stronger economy, transform our country and bring down cost for people long-term." The Chancellor, Mr Healey, commented: "Today's everyday fixes are just a small part of what we are doing to give families a bit of breathing space."
It emerged on Monday that the Budget is expected to provide a £432 million boost to help ensure homeless people are off the streets by Christmas. Mr Burnham expressed his desire to give "every single person" sleeping on the streets an offer of help by the end of this year.
