The Chancellor of the Exchequer, Rachel Reeves, has today announced a series of measures intended to help individuals to address the rising cost of living.
These include a 10p rise in the tax-free mileage rate, from 45p to 55p for cars and vans for the first 10,000 business miles per tax year, backdated to 6 April 2026. This is the first increase for 15 years, since 2011.
The rate for mileage over 10,000 and the motorcycle rate remain unchanged.
Alongside this, fuel duty will remain frozen (again) – a 5p rise due at the end of August 2026 has been postponed until at least December 2026.
Other announcements made today include:
- A temporary reduced rate of VAT for “Great British Summer Savings” (5% instead of 20%) to save families money on days out, applying from 25 June to 1 September 2026. The reduction applies to:
o children’s restaurant meals
o child and family tickets for cinemas, theatres, concerts, shows and exhibitions, and attractions including amusement parks, museums
o child and adult admission tickets for attractions including amusement parks, museums, etc.
- Free local bus travel for under-16s in England this August (it is already free in London and Scotland).
- “Targeted cuts” to the import tariffs for certain food items, including biscuits, chocolate, dried fruit and nuts, which the Government expects should lead to a reduction in the prices paid by customers of “more than £150 million a year”.
