Mileage allowances

motorway sign

A summary of the changes to the NHS terms and conditions of service handbook, amendment number 29, relating to mileage allowances, which came into effect on 1 July 2013. 

  • Under the new system, the rates of reimbursement will be reviewed every April/May and November/December, using information published in the AA motoring cost guides, to ensure rates move up and down, in line with business motoring costs.
  • removal of the 'regular' and 'standard' user categories.  Employers should refer to ESR User Notice Number UN1780
  • removal of 'regular user' lump sums and all allowances linked to engine size
  • standard rates of reimbursement for staff using their privately owned vehicles to make NHS business journeys
  • twice yearly reviews for rates of reimbursement in line with changes in motoring costs
  • updated guidance on local leased vehicle policies

These arrangements do not apply to staff within the remit of the Doctors' and Dentists' Review Body.  

Very senior managers will be paid according to their local policies and contracts of employment.

Rates of reimbursement from 1 July 2013

Type of vehicle/allowance Annual mileage up to 3,500 miles (standard rate) Annual mileage over 3.500 miles (standard rate) All eligible miles travelled (see paragraph 17.15 and Table 8)
Car (all types of fuel) 67 pence per mile 24 pence per mile  
Motor cycle     33 pence per mile
Pedal cycle     20 pence per mile
Passenger allowance     5 pence per mile
Reserve rate     33 pence per mile
Carrying heavy or bulky equipment     3 pence per mile

First review - November 2013

These rates of reimbursement were checked (in November 2013) to ensure they continue to reimburse employees in line with motoring costs.  This check looked at the average fuel price in the twelve month period ending in October.  Changes in fuel prices since the rates were first calculated in May 2013 had an impact of minus 0.1 per cent on the standard mileage rate.  Rates change if the impact on the standard rate is five per cent or greater.  As the impact this time was less than five per cent, the standard and other rates of reimbursement remained unchanged.

The next review is in April/May 2014 when all the motoring costs taken into account in producing these rates of reimbursement will be included.

Jointly agreed frequently asked questions 

The Agenda for Change partners will make every effort to continue to support, encourage and promote a partnership approach to the operation of the pay system at local level.

The agreement to work in partnership to deliver an NHS pay system which supports NHS service modernisation and meets the reasonable aspirations of staff should, therefore, be replicated at local level. 

The guidance below on Section 17 has been jointly agreed in partnership by the NHS Staff Council Executive and is intended to help in situations where, locally, the joint partners have not so far been able to agree a suitable way forward.

The NHS Staff Council has agreed the following frequently asked question.

What happens if an employer's offer of a lease car is dependent on the employee also accepting a salary sacrifice scheme?

The national agreement does not mention this situation in Annex M.  Local partnerships looking to link lease cars and salary sacrifice schemes should consider carefully the future implications for pay and tax.  Salary sacrifice depends on remuneration being given up before it is treated as received for tax and NICs and it must be that the employee receives lower cash remuneration and a benefit.  Salary sacrifice may impact on an employee's pay and conditions such as maternity and paternity pay as well as sickness entitlement and pensionable pay.  It can also affect state benefits, including pension and tax credits.  Whilst there may be mutual benefits to employers and employees in agreeing salary sacrifice, due to their impact it would not be reasonable to treat a refusal to accept a lease car on such terms as an unreasonable refusal.  In these circumstances staff should be reimbursed to the standard rate for miles travelled.  Information about salary sacrifice is on the HMRC web site including the advice that local partnerships of employers and employees ". . . . would be well advised to obtain legal advice on whether their proposed arrangements achieve their desired result".

Find out more

The Sections and Annexes are in the NHS terms and conditions of service handbook.  See also Pay Circular (AfC) 3/2013.

In addition, the NHS Employers organisation have produced some frequently asked questions.

If you are an employee, please speak to your local HR team or your staff side representative.

If you are an employer and have queries about the new arrangements, please email   

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