A new tax change which came into effect this month is set to deliver a long-awaited boost for freelancers, sole traders, and anyone using their own vehicle for work.
The Chancellor has increased the mileage allowance by 10p, meaning workers can now claim 55p per mile for the first 10,000 business miles – the first rise since 2011.
Commenting on the news, Joe Phelan, money.co.uk business savings expert, said:
“Following rising fuel costs, the Government has announced a 10p-per-mile increase in mileage allowance for employees, the first such move since 2011 and a significant adjustment for self-employed people that rely on their own cars for business operations.
“For the UK’s millions of sole traders, this 10p-per-mile hike will be a welcome relief that directly reduces their taxable income. For a freelancer or consultant covering 10,000 business miles a year, this shift can represent an additional £1,000 in tax-deductible expenses, providing a vital buffer for cash flow.
“The change means people can claim their mileage on the new rates back to April 2026, offering financial relief for thousands of ‘white van’ workers, mobile service providers, and freelancers who have been absorbing the ‘cost of working’ on frozen rates for well over a decade.”