Jim McMahon welcomes increase in HMRC mileage rates after campaign

Jim McMahon MP

Oldham West, Chadderton and Royton MP Jim McMahon has welcomed a government decision to increase HMRC mileage rates for the first time in 15 years following a campaign involving trade unions, motoring organisations and MPs.

The Approved Mileage Allowance Payment rate will rise from 45p to 55p per mile and the change will be backdated to April 2026.

Mr McMahon said he had worked alongside the union UNISON and the RAC Foundation to press for a review of the mileage allowance, arguing that rising fuel, insurance and vehicle running costs had left many workers out of pocket.

The allowance is used to calculate tax free mileage payments for employees who use their own vehicles for work.

Mr McMahon said the government had also committed to carrying out a wider review of the rate ahead of the next Budget.

He said, "When I returned to the backbenches I committed to championing issues impacting decent working people, but which too often went ignored.

"I'm delighted to have played a part in leading calls for the HMRC mileage rates to finally be updated, putting money back into the pockets of working people. A win."

The MP said frontline workers, carers and self employed people who rely on their vehicles for work had been particularly affected by rising costs over recent years.

He added, "For too long, frontline workers, carers and self employed people who rely on their car for work have been left out of pocket while fuel, insurance and running costs kept rising."

Mr McMahon described the increase as a welcome step and said campaigners would continue to engage with the wider review of mileage allowances.

The government announcement was made as part of a wider package of measures which Mr McMahon said included support for transport users, businesses and energy intensive industries.