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.
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.
Relief on fuel duty and hauliers get road tax holiday
- The government have announced some fuel duty and road tax changes which are designed to assist with the increased costs caused by the Middle East conflict.
- A 5p fuel duty cut has been in place since March 2022. The relief was due to end between September this year and March 2027. It has now been confirmed that the cut will be extended until the end of the year.
- Hauliers are being given a 12-month road tax holiday. The normal annual charge of £600 for a typical heavy lorry and £912 for the biggest vehicles will be reduced to £1 at the vehicle’s next road tax renewal.
- Fuel duty on red diesel will be cut by over a third until the end of the year. This will benefit farmers, rail freight and other red diesel users.
