2026-27 self-employed mileage allowance increase & DWP

liamfitz

Hello,

I'm both self-employed ( part-time ), and in receipt of U.C. As a driver I receive a mileage allowance from UC, which is not counted as earnings, which is the same as HMRC, i.e. 45p per mile. As this has now increased, to 55p per mile for HMRC 2026-27, will UC ( DWP ) be increasing the allowance also, as they haven't done so yet ? Thank you.

Albermarle

Remember that the 45 p a mile is a limit set by HMRC, up to which limit no tax is payable. An employer can pay more or less than this if they want.

I know your situation is different but just making clear that 45p a mile is not a compulsory figure from HMRC.

Grumpy_chap

What amount is the OP declaring as sole trader expenses for their mileage?

This query may be better suited to the benefits board rather than cutting tax.

NedS

DWP updated their guidance on 1st May 2026 and it still says 45p per mile for the first 833 miles and 25p per mile thereafter:

https://www.gov.uk/government/publications/universal-credit-for-the-self-employed/business-expenses-you-can-report-to-universal-credit-if-you-are-self-employed

I see nothing to suggest DWP will increase the UC allowance at this time, but they may just be slow to react to HMRC's increase, which I believe was introduced in response to the Iran crisis and backdated to the start of the tax year.

However, for a definitive answer on matters of policy, you would have to ask DWP (or your MP to get an answer from DWP on your behalf)

sheramber

https://forums.moneysavingexpert.com/discussion/6671639/2026-27-self-employed-mileage-allowance-increase-dwp

HMRC and DWP allowance is not the same as HMRC allow higher amount for first 10,000 miles but DWP only allow it for 833 miles

NedS

https://forums.moneysavingexpert.com/discussion/comment/82028942#Comment_82028942

The DWP 833 mileage figure is a monthly equivalent (10,000 / 12 = 833) as UC is a monthly benefit whereas HMRC taxes apply annually.

Yamor

DWP's intention with UC was to mirror the tax rules as closely as possible. But they are slow to update.

Another change which was made by HMRC, but which still hasn't been brought through to UC was the abolition of the £500 annual limit on interest. HMRC changed that already over two years ago!

deliveryguy1

Any updates on the question of Universal Credit mileage allowance this could be worth £83.30 to some one on Uc for a month its not cheap to run car doing food delivery insurance between 18 to 20p a mile fuel 18p a mile and repairs all adds up