Current NHS mileage rates react to sustained changes in fuel prices, not the full costs of motoring. We have worked with employers and the other NHS trade unions to develop a new mechanism that more fairly reflects the cost of using your own car. Rates will then be reviewed periodically based on a measure of inflation.
How does the new mechanism work?
- Rates will adjust with changes to inflation linked to motoring costs (published by the Office for National Statistics)
- Rates reviewed every six months by unions and employers, and will adjust if there’s a change of more than a whole penny
- Proposed change in threshold for drop down rate to 4500 miles (bringing 98.4% of eligible miles into higher rate)
- New baseline rates will apply from 1 April 2026, aligning with the tax year
Who will this affect?
- Mileage rates apply to people using their own car for work and are not applicable for commuting
- Where section 17 has been varied locally, branches should assess whether the new mechanism or their local agreement is preferable
- This new mechanism is not designed to incentivise driving but rather more fairly recompense staff using their own car for work and shift the cost of driving for work onto the employer
- Shifting costs to the employer incentivises the employer to minimise miles driven and to invest in greener alternatives
New thresholds and rates
Current Section 17 NHS Mileage Rates from 1 Jan 2026
<3500 miles 56p per mile
>3500 miles 21p per mile
Proposed new baseline rates
<4500 miles 59p per mile
>4500 miles 36p per mile
Why to support the new mechanism
- This new mechanism is a union win, fought for over severalyears
- This is the best deal that can be achieved through negotiations
- The new mechanism, review process, and threshold adjustments come as a package and not a pick-and-choose range of options
- The alternative to accepting the new system is remaining oncurrent terms that only react to sustained changes in fuel prices
