Did you know that NHS staff can claim up to 59p per mile for work related travel?
Despite this valuable benefit, many healthcare workers don't claim their full entitlement and the reason for this is not clearly understanding their rights.
In this article, we simply explain what the NHS mileage allowance is, and how to claim it with consideration of tax.
Whether you're a community nurse making daily patient visits, a doctor on rotation, or any NHS staff member travelling between sites, navigating these regulations effectively can make a significant difference to your finances.
Table of Contents
What is NHS Mileage Allowance?
NHS mileage allowance is a travel expense payment system that helps NHS workers get money back when they use their own vehicle for work purposes, (except for their normal journey to and from work)
What is an example of work-related travel?
Think of it like this. You are an NHS worker:
Current Mileage Rates
As per the official data, the current mileage rate is as follows:
| Type of Travel | NHS Rate | HMRC Rate |
|---|---|---|
| First 3,500 miles | 59p per mile | 45p per mile |
| After threshold | 24p per mile | 25p per mile |
| Threshold applies after | 3,500 miles | 10,000 miles |
* Rates may vary with each NHS trust and with local agreements.
* Any amount above HMRC rate is taxable.
Some trusts pay more than others. Always check with your local NHS trust before deciding.
If you are paid more than the HMRC rate, (45p), you will need to pay tax on the difference. For instance, if you are paid 59p per mile, and the HMRC rate is 45p, you'll need to pay tax on the difference.
Is there a difference between different types of vehicles?
Yes, the allowance varies from vehicle to vehicle.
See the following table for reference:
| Travel Type | Up to 3,500 miles | Over 3,500 miles | Standard Rates |
|---|---|---|---|
| Car (all fuels) | 59p per mile | 24p per mile | - |
| Motorcycle | - | - | 30p per mile |
| Bicycle | - | - | 20p per mile |
| Passenger | - | - | 5p per mile |
| Reserve Rate | - | - | 30p per mile |
| Heavy Equipment | - | - | 3p per mile |
* Rates effective from January 2023
* All rates subject to local trust variations
* Reserve rate applies in specific circumstances (see NHS guidance)
Are there any recent changes?
There have been significant changes to the mileage allowance system. The most recent changes took place in December 2023.
The system has been simplified by removing the distinction between regular and standard users, and engine size no longer affects reimbursement rates.
The NHS Staff Council now reviews fuel costs twice yearly, (April/May and November/December), implementing changes in January and July, but only if there's more than a 5% change in rates up or down.
This streamlined approach means all staff receive the same rates regardless of their travel frequency, with the system being more responsive to fuel cost changes.
Are there any regional variations or is it standard across the UK?
While some NHS employers have responded by increasing their rates, others haven't, creating varying situations across different UK regions.
Eligibility?
Who can claim?
All staff covered by the NHS terms and conditions of service handbook can apply for the discount.
There are few exceptions including:
- Doctors and dentists, (except those on 2016 training contracts in England).
- Senior managers, (as they follow local policies).
- Staff with locally agreed alternative arrangements.
Are there minimum mileage restrictions for eligibility?
Their are no minimum mileage restrictions that are required in order to be eligible for a claim.
If its a business travel (not regular commute) and additional to normal home to base mileage, and is approved work related travel then you are eligible for a claim.
Are there frequent time delays in reimbursement?
The reimbursement timeframes vary between different NHS organisations.
For specific information about payment timelines, staff should consult their local trust policy, payroll department, or line manager.
Is the training and rotational travel eligible for travel?
Training and rotational travel is eligible for NHS mileage claims, excluding your normal commute.
While the standard home-to-base travel isn't covered, you can claim any additional mileage incurred due to mandatory training or rotations.
If you're moved to a new base with extra travel costs, you're eligible for the reserve rate of 30p per mile. This applies to all staff under NHS Terms and Conditions, with doctors on 2016 contracts following the same reimbursement rates.
Why the reserve rate applies?
The NHS reserve rate of 30p per mile applies in three key situations: when staff unreasonably decline an employer's lease car offer, when returning to work or doing overtime, and when relocated to a new base with additional travel costs.
Unlike standard mileage rates (59p/24p), this rate stays fixed regardless of annual mileage or fuel price reviews.
It's independent of other allowances like passenger payments (5p) or equipment carrying (3p), serving as a middle-ground rate that balances fair compensation with efficient resource use
Emergency callouts? Can you claim?
Yes, you can claim for emergency callouts. Emergency travel falls under overtime work. It is eligible.
There is no extra allowance for emergency callouts. The same standard rate is given as mentioned above.
Tax Implications and Compliance
As mentioned above, the NHS pays 59p per mile (first 3,500 miles), HMRC's approved tax free rate is only 45p per mile.
The NHS handle this taxation through regular payroll by adding the taxable portion to your salary, or via a P11D form if mileage is paid separately.
Some trusts cite P11D processing as complex, modern payroll systems handle these calculations automatically, ensuring you receive your full reimbursement while staying tax-compliant.
How does the excess mileage taxation work?
Take this example:
If you receive the NHS rate of 59p per mile, anything above HMRC's approved rate of 45p per mile (the excess 14p) is considered taxable income.
So, if you travel 100 miles in a month, you'll be paid £59 (100 × 59p), but £14 (100 × 14p) of this will be taxable as additional income. This taxable portion is either added to your regular salary through payroll or reported via a P11D form, with tax and National Insurance, then calculated on this excess amount.
After 3,500 miles, when the NHS rate drops to 24p per mile, there's no excess taxation as this falls below HMRC's rates.
What are the Potential Concerns?
Reimbursement for employees that have long commutes.
One of the significant oversights in the current NHS mileage system, is the lack of support for staff with lengthy commutes.
While the NHS reimburses business-related travel, the daily commute to and from work - no matter how long - isn't eligible for compensation. This creates challenges for healthcare professionals who live far from their workplace due to family commitments, partner's work location, or training rotations.
A review of the current system to better support long-distance commuters could help ensure better workforce distribution and staff wellbeing across the NHS.
The rises in fuel costs are not always reflected in reimbursement rates.
While the NHS Staff Council reviews rates twice yearly, the requirement for a 5% change before any adjustment means many significant fuel-price increases go unaddressed.
To better align reimbursement rates with fuel costs, the NHS could modernise its adjustment system.
Moving from bi-annual to quarterly reviews would enable quicker responses to price changes, while lowering the current 5% threshold would capture smaller but significant increases.
An automated adjustment system tracking real-time fuel prices, combined with consideration of regional price variations, would create a more equitable system.
Setting maximum response times for significant price spikes and providing local trusts with emergency funding would ensure staff aren't left covering excessive costs during volatile periods.
These changes would create a more responsive and fair system.
FAQs
What happens if I'm based at home?
If agreed with your manager, you can claim for all business miles from home to visited places and back.
Is there a difference between regular and standard users?
Prior to recent changes, NHS mileage allowance had two distinct categories - 'regular users' and 'standard users'.
Regular users were staff who either travelled at least 3,500 business miles annually, covered at least 60% of their working days in travel, or completed a minimum of 500 business miles monthly.
Standard users were those travelling less frequently. This system previously offered different rates based on usage but has now been simplified.
Current rules that came into place makes no distinction between user types. All eligible staff receive the same mileage rates regardless of how often they travel, making the system more straightforward and equitable for everyone.
What if my trust pays different rates?
Trusts can set local rates through negotiation, but most follow the national guidance rates.
Motorfinity and the NHS
At Motorfinity, we pride ourselves on offering exclusive discount across all makes and models for UK NHS staff.
Whether you're looking for efficiency, style, or cutting-edge technology, our selection is designed to meet every need.
You can choose from Personal Contract Purchase (PCP), Hire Purchase (HP), and leasing deals. Each option provides flexibility and benefits tailored to different driving habits and budgetary needs.
Are you eligible?
Our nations Armed Forces, Veterans, Emergency Services, NHS, Police and Prison Services, the Education and Social Care sectors and more form our eligible audience.
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