On 21 May 2026, the Chancellor, Rachel Reeves MP, announced ‘Great British Summer Savings’, a package of
measures aimed at cutting costs for families, particularly those with children.
The following two measures are of particular importance to businesses:
Tax-Free Mileage Rates
A 10p per mile increase in tax free mileage rates will apply in the 2026/27 tax year, backdated to April 2026. The
increase relates to the amount per business mile driven that attracts tax relief and affects both employees and the
self-employed. HMRC’s mileage rates guidance has been updated as follows:
For the self-employed:
| Vehicle | Flat rate per mile for 2026/27 | Flat rate per mile before 6 April 2026 |
| Cars and goods vehicles – first 10,000 miles | 55p | 45p |
| Cars and goods vehicles – after 10,000 miles | 25p | 25p |
| Motorbikes | 24p | 24p |
For employees:
| Vehicle | Flat rate per mile for 2026/27 | Flat rate per mile before 6 April 2026 |
| Cars and vans – first 10,000 miles | 55p | 45p |
| Cars and vans – after 10,000 miles | 25p | 25p |
| Motorbikes | 24p | 24p |
| Bicycles | 20p | 20p |
Note that only the rate for cars and vans for the first 10,000 miles has increased; other rates are unchanged.
Temporary Reduced Rate of Vat
From 25 June to 1 September 2026, the 5% reduced rate of VAT will apply to the following eligible activities:
- Children’s meals. To qualify for the reduced rating, the meal:
– Must be held out for sale as a meal for children.
– Must be a supply of catering by a restaurant, café or similar establishment and consumed on the
premises.
– Must not be takeaway food.
– Can include drinks. - Children’s cinema, theatre, show and concert admissions tickets.
- Admission to qualifying attractions that are suitable for children. This includes amusement parks,
museums, heritage sites, zoos and soft play areas. The reduced rate applies to all admissions,
regardless of the customer’s age.
If you’d like to know more about these measures please get in touch – we can discuss how they may
affect you and your business.