The Chancellor of the Exchequer (John Healey)
Millions of families and working people across the country will benefit from five everyday fixes, which will support people who rely on their cars for work, extend help to new parents and fix an unfair cliff edge that can penalise unpaid carers for earning more. These changes will help with the cost of food, fuel and family life, providing breathing space for households. The Government are announcing changes to:
Go further to support employees and self-employed people who use their own vehicle for work by increasing tax free mileage rates. Approved mileage allowance payments allow employers to reimburse employees tax-free for business mileage in their own private vehicles, and the same rates are used by self-employed drivers to claim tax relief through simplified motoring expenses and payments made within the approved rates can be disregarded for class 1 national insurance purposes. In May the Government increased the tax-free mileage rate for the first 10,000 business miles for the first time in 15 years, from 45p to 55p per mile for 2026-27. The Government are today announcing that we will make that increase permanent and, to support those who drive the furthest for work, we are also increasing the rate above 10,000 miles from 25p to 35p per mile. Around 3 million people are expected to benefit, with someone driving 6,000 business miles receiving up to £120 a year in additional tax savings, and someone driving 15,000 business miles receiving up to £300 in additional tax savings.
Extend parental pay to eligible self-employed fathers, partners and adopters in Great Britain from April 2029. Those who are recently employed or unemployed, or with a broken or irregular pattern of employment will also benefit, provided that they have sufficient work and earnings history. This new parental allowance is expected to benefit over 150,000 parents each year. Detailed eligibility criteria will be confirmed in due course.
End the cliff edge within carer’s allowance, which sees carers lose £86.45 per week for a 1p increase in earnings above the weekly limit. Instead, earnings above the weekly earnings limit will be subject to a 100% taper, where support is reduced by only £1 for each £1 increase in earnings. This means carers are no longer left financially worse off for working additional hours or receiving a pay rise. The taper will begin within 2030-31 once the Department for Work and Pensions has developed a new IT system to implement the taper.
Suspend import tariffs on over 100 food products, fertilisers and kerosene heating oil to help reduce costs for households and businesses. Lower tariffs on food products are expected to deliver consumer savings worth around £120 million to £185 million per year. The Government are also extending existing business suspensions that are due to expire in 2026 and 2027, enabling domestic businesses across many sectors to continue to benefit from lower import costs. A new application window will be open from 11 November to 3 February, giving businesses the opportunity to submit views on further extensions and apply for new tariff suspensions.
Roll out hundreds more post office drop boxes, bringing the total to 1,000, making it easier and more convenient for people to send and return parcels without having to queue at a post office counter, helping to take some of the hassle out of everyday errands in the run-up to Christmas. This comes alongside upgrades to 600 post office branches by the end of the financial year, improving services for customers across the country.
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