Labour MP Demands Urgent HMRC Mileage Rate Increase for Frontline Workers
Former minister Jim McMahon has issued a powerful demand for the government to immediately increase the outdated HMRC mileage payment rate that is severely impacting low-paid frontline workers, including carers and social workers. The current reimbursement rate of 45p-per-mile has remained unchanged since 2011, creating what McMahon describes as a stealth tax on essential workers.
Outdated Rates Leave Workers Subsidising Their Employers
In an exclusive article for The Mirror, McMahon highlighted how the frozen mileage rate has failed to keep pace with the soaring cost of living over the past fifteen years. Food, energy, rent and mortgages have all increased dramatically, and so has the cost of running a car, he explained. For millions of workers who rely on their vehicles for employment, these expenses are unavoidable and are effectively forcing them to pay to do their jobs.
The situation affects not only self-employed individuals but also employees who receive mileage reimbursements from their employers. McMahon warned that this financial burden is dragging real wages below the National Living Wage and deepening the ongoing cost-of-living crisis for those who keep the economy functioning.
Real-World Impact on Social Workers and Carers
The human cost of this policy failure is illustrated through the experience of Gemma, a 55-year-old social worker with two decades of experience working with children and families. She travels between 300 and 500 miles monthly for work, often responding to crisis situations at very short notice for home visits.
Increasing the rate would make things a lot easier on the purse strings, Gemma told The Mirror. Putting it up to the proper rate would make things much more worthwhile. She revealed that overworked staff in under-resourced departments frequently lose out on legitimate mileage claims simply because they lack the time to submit paperwork promptly amid their demanding caseloads.
In a direct message to government officials, Gemma pleaded: Please listen to the people who are actually doing the job. I don't think we should be made to feel we're begging for an increase in something that is badly needed. We're doing this because we want to help people, so can you help us to keep doing that?
Expert Analysis and Proposed Solutions
Both Unison and the RAC Foundation have previously calculated that mileage allowance payments should be increased to 67p-per-mile to reflect actual driving costs in today's economy. Unison assistant general secretary Jon Richards emphasized that frozen mileage rates have quietly shifted hefty costs onto workers, creating what he called a clumsy stealth tax while people already grapple with soaring living expenses.
Richards added: Public service staff who rely on their own cars to do essential work are thousands of pounds out of pocket simply for doing their jobs. An increase in the rate is long overdue and urgently needed. He noted that while staff are working toward fairer deals within the NHS, it is HMRC that must take decisive action to ensure rates reflect the real cost of driving and prevent workers from subsidising their employers from their own pockets.
Political Response and Future Implications
McMahon positioned Labour as the party of working people in his call for government intervention. Labour is the party of working people, he stated. That is why I'm calling for government to instruct HMRC to finally refresh the mileage rate and show working people that they have a government on their side.
The issue represents a significant policy challenge that affects multiple sectors of the workforce, particularly those in care professions, social work, and other frontline services where vehicle use is essential. With the rate unchanged for fifteen years despite dramatic economic shifts, the call for reform highlights broader concerns about how government policies adapt to changing economic realities and support those performing vital societal roles.
