The increase in the tax free mileage allowance has been slipped in without much fanfare – so little in fact few people were even aware of it!
Our ever generous government, following hot on the heels of the magnanimous 1p per litre cut in the fuel duty on Budget day last month, have finally increased the mileage allowance that employees are allowed to be paid tax free by their employers.
Don’t get too excited. The change only relates to the first 10,000 miles and from 6th April 2011 the rate has increased from 40p/mile to a staggering 45p/mile. The rates for more than 10,000 miles in a tax year remains at 25p/mile.
I am being a bit scarcastic because a 12.5% increase after so many years only takes us back to the pre 2002 Authorised Mileage Rate of, yes you guessed it, 45p per mile.
All of this at a time when fuel costs have rocketed by nearly 30% in the last 12 months alone.