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June 2026 – Updated HMRC mileage rates and government consultation on zero hours contracts, etc

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Employment Update for Small Businesses
June 2026
Dear Subscriber

This month we have an update on HMRC mileage rates – tax is not our bag, as you know, but this is an update that crosses over significantly with HR.

Also, please note that the Government has recently launched a number of consultations relating to some of the remaining items under the new Employment Rights Act – such as rights for zero hours workers and unpaid carers. Click on this link if you would like to find out more and join in the consultation process.
Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.

Please forward this email to any of your contacts who might find it of benefit.
Regards
Peter Etherington
Tel: 01664 668164

www.etherington.co.uk

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Peter Etherington
HMRC update to mileage rates
From 45p to 55p per mile
For as long as I can remember the HMRC approved mileage rate has been 45p per mile for the first 10,000 miles and 25p per mile thereafter. But from 6th April 2026 that has increased to 55p per mile for the first 10,000 miles and 25p thereafter.

Admittedly, that is a tax update and we don’t do tax! However, from an HR perspective we wanted to explain what that means in terms of how you should compensate employees for business mileage. It does not mean that you have to pay them 55p per mile, it just means that is the maximum you can pay them without it having tax implications. Some of our clients pay less than 45p currently and can continue to do so. Some currently pay 45p per mile but there is no obligation to increase that amount. It is entirely up to you.
National Minimum and Living Wage
Current National Living Wage and National Minimum Wage rates are as follows:

  • £12.71 per hour for workers aged 21 and over
  • £10.85 per hour for workers aged 18 to 20
  • £8.00 per hour for workers aged 16 and 17, and for apprentices under 19 and those over 19 in their first year*

*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.
www.etherington.co.uk