UK drivers face unfair reimbursement rates

The HMRC mileage reimbursement rate has not been updated since 2011, to the dismay of British drivers. The UK mileage rate is the lowest when compared to the USA and Australia, despite UK petrol prices being significantly higher. 

Mileage tracking made easy

Trusted by millions of drivers

Automate your mileage log Automate your mileage log

Claim your deductions

Reclaim your time

Automatic mileage tracking and HMRC-compliant reporting.

Get started for free Get started for free

When adjusting for fuel, the HMRC rate is effectively half 

Petrol is obviously just one of the operating costs you will incur while using your private vehicle for business purposes. But seeing as cars are also more expensive to buy and insure in the UK, these factors do not explain the disparity in rates.

The graph shows the historic relationship between fuel prices and reimbursement rates. Increasing lines indicate more reimbursement required to buy one litre of petrol. 

UK drivers have always had a lower rate, and the recent rise in fuel prices has only exacerbated the issue.

In 2022 Brits had to get reimbursed for 3.66 miles to pay for one litre of petrol. Meanwhile, Americans only had to drive 1.59 miles and Australians as little as 1.47 miles.
This means that when adjusting for fuel prices, the HMRC mileage rate is effectively less than half of the US or Australian one.

The rate disparity can add up to thousands in a single year

In the table below we use data from 2022 to exemplify how much the low UK rate costs an average British driver in a year.

Driving 8 average length trips per week, while paying average petrol prices, leads to starkly different reimbursements per year, depending on country.

^{*Based on 38 million business trips recorded by Driversnote in 2022.
**Based on an average MPG of 36.}

The rightmost column shows that our average UK driver has £1500 less per year after fuel expenses have been covered, compared to drivers from the US or Australia. This money could go toward maintaining and paying for the car. 

Where do we go from here?

Petitions to raise the mileage rate are fairly frequent on Parliament’s website. But they have failed to garner the required 100.000 signatures, that would qualify them for debate in Parliament.
A recent petition proposed to raise the rate from 45p per mile to 60p.
A 15p raise would leave our average UK driver with £2968 to maintain their car after fuel expenses, bringing it closer to the US and Australia.

About the data

_{The petrol prices and reimbursement rates are the annual averages from each country, sourced from their respective government websites (Petrol prices: eia.gov, energy.gov.au and gov.uk). Prices used are for the most utilised petrol grade in the given country. All amounts have been converted to miles, litres and pound sterling. 
Monetary conversions were done with the 2022 annual average rate, because the purchasing power within the markets are more relevant to this comparison than the purchasing power between them.}