HMRC Volunteer Mileage Rate 2026: What the New 55p Rate Means for Charities

HMRC has increased the approved mileage rate for cars and vans from 45p to 55p per mile, the first increase in 15 years. The change was announced on 21 May 2026 and applies retrospectively from 6 April 2026. For charities, the practical effect is simple: you can now reimburse volunteer drivers up to 55p per mile for the first 10,000 miles in a tax year without any tax implications for the volunteer. This article explains what has changed, why it happened, and the four things every charity should do now.  

What was the HMRC volunteer mileage rate before April 2026?

Q. How much could UK charities reimburse volunteer drivers per mile before April 2026?

A: Up to 45p per mile for cars and vans, for the first 10,000 miles driven in a tax year, and 25p per mile after that. That rate had been in place since 2011.

Most UK charities reimburse volunteer mileage using HMRC's approved mileage rates. Strictly speaking, these rates are written for employees who use their own vehicle for work. Volunteers sit outside that legislation, but HMRC uses the same rates as the benchmark for what counts as reasonable reimbursement. As long as a charity pays at or below the approved rate, the payment simply repays what the volunteer has spent, and there is nothing for either side to report.

In practice, that made 45p per mile the ceiling that charities worked to for a decade and a half. Some paid less because of budget constraints, which NCVO notes is common across the sector. Very few could pay more without creating complications for their volunteers.

How has the HMRC mileage rate for volunteers changed in 2026?

Q: What is the HMRC mileage rate for volunteers in 2026/27? A: 55p per mile for cars and vans for the first 10,000 miles in a tax year, then 25p per mile after that. The new rate applies from 6 April 2026.

The Chancellor announced the increase on 21 May 2026, and it was backdated to 6 April 2026, the start of the 2026/27 tax year. The headline rate for cars and vans rose from 45p to 55p per mile, an increase of 22%.

The other rates did not move. For completeness, the full set of approved rates for 2026/27 is:

• Cars and vans: 55p per mile for the first 10,000 miles, then 25p per mile
• Motorcycles: 24p per mile
• Bicycles: 20p per mile
• Passenger payments: an additional 5p per mile, per passenger carried

That last one matters more to charities than to most employers. Community transport schemes, hospital run services and befriending programmes often involve volunteers driving passengers, and the 5p per passenger payment sits on top of the 55p.

Why did HMRC increase the mileage rate to 55p after 15 years?

Q: Why did HMRC increase the approved mileage rate to 55p in 2026?
A: The official reason is that the rate no longer reflected the real cost of running a car. At vHelp we strongly believe the change matters for a bigger reason: volunteers retention. Volunteers who are left out of pocket stop volunteering, and a fairer mileage rate helps charities keep them. The evidence is below.

The 45p rate was set in 2011 and then frozen while the cost of running a car climbed year after year. The pressure to change it built steadily through the cost of living crisis. A public petition calling for an increase gathered more than 40,000 signatures, and in 2023 MPs debated the issue in Westminster Hall, warning that volunteer drivers were being left out of pocket and that some were giving up driving altogether. The Association of Taxation Technicians, the RAC and the AA all called for an uplift.

In March 2026 the Treasury announced a review of the rates, and the 55p figure followed two months later.

For charities, the timing is no accident and no small thing. Rising costs have made unpaid expenses one of the quiet drivers of volunteer attrition. Our white paper, Why Volunteers Quit, on volunteer expenses and retention sets out the evidence in full: when volunteering starts costing volunteers money, some of them stop. A rate that finally reflects the real cost of driving removes one of those pressures, but only if charities actually adopt it.

What should charities do about the new 55p mileage rate?

The new rate is a ceiling, not an obligation. Nothing forces a charity to pay 55p. But a charity that stays at 45p is now asking volunteer drivers to absorb a cost that HMRC has formally recognised they should not have to. Here are four actions to take.

1. Update what you pay your volunteers. Start reimbursing volunteer drivers at 55p per mile. They have carried the rising cost of fuel, insurance and wear and tear at the old rate for years.

2. Tell your volunteers and update your paperwork. A rate change buried in a policy document changes nothing. Announce it in your volunteer newsletter, email volunteers who claim mileage regularly, and mention it at team meetings and inductions. It is a rare piece of genuinely good news to share, and it signals that your organisation does not expect volunteers to subsidise their own volunteering. Also, amend your written expenses policy, update any claim forms or spreadsheets with 45p baked into a formula, and update the rate on your expense software. 

3. Consider topping up claims already made this year. Because the change is backdated to 6 April 2026, mileage claimed at 45p since that date can be topped up by 10p per mile with no tax consequences. For a volunteer driver doing 100 miles a month, that is £10 a month owed back to them. Small amounts, but they land with people who notice.

Volunteer mileage rate 2026: frequently asked questions

Do charities have to pay volunteers 55p per mile? No. The approved rates are upper limits for tax-free reimbursement, not a minimum. Charities can pay less, and some do for budget reasons. But 55p is now the amount HMRC accepts as reflecting the real cost of driving.

Can a charity pay volunteers more than 55p per mile? It can, but payments above the approved rate may count as a taxable profit for the volunteer unless they can evidence that their actual costs were higher. Most charities avoid this complication by staying at or below the approved rate.

Is the new 55p mileage rate backdated to April 2026? Yes. Although it was announced on 21 May 2026, the 55p rate applies to all qualifying mileage from 6 April 2026.

Does the 55p HMRC mileage rate apply to electric cars? Yes. The approved rate is the same regardless of fuel type, so volunteers driving electric or hybrid cars are reimbursed at the same 55p per mile.

Do mileage payments to volunteers need to be reported to HMRC? Not if you reimburse at or below the approved rates. Payments within the rates simply repay the volunteer's costs and there is nothing to report.

How vHelp supports charities reimburse volunteer mileage

Updating a number in a policy is the easy part. Getting reimbursements to volunteers quickly, with a clear record and without paper forms, is where many charities still struggle.

vHelp is a UK-based payment platform that reimburses volunteers directly to their bank account within 24 hours. Volunteers submit a claim in seconds, including mileage, your team approves it in one click, and the money lands the next day, with a full audit trail behind every payment. Organisations using vHelp cut expense admin by 85%.

If your charity is updating its mileage rate this year, it is a good moment to look at how you pay expenses altogether. See how vHelp works for charities by requesting a demo.

Photo by Darwin Vegher on Unsplash