Workers who use their own vehicles for business journeys will benefit from the first change to mileage rates in 15 years.
Following a successful campaign backed by Oldham West, Chadderton and Royton MP Jim McMahon, the HMRC Approved Mileage Allowance Payment (AMAP) has risen from 45p to 55p per mile, with the change backdated to April.
Mr McMahon said: "When I returned to the backbenches I committed to championing issues impacting decent working people, but which too often went ignored.
"I’m delighted to have played a part in leading calls for the HMRC mileage rates to finally be updated, putting money back into the pockets of working people.
"A win."
The Labour MP credited the campaign involving trade union Unison, the RAC Foundation, and support from the Mirror newspaper.
He said workers, including carers and the self-employed, had been left out of pocket for too long as vehicle running costs continued to rise.
Mr McMahon said: "This is a welcome and overdue step forward, and proof that campaigning works and that only Labour are on the side of working people."
He emphasised that the new rate is part of a broader package of support measures announced by the government.
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These include a year of road tax relief for HGVs worth more than £900, free summer bus travel for under-16s, VAT cuts on UK attractions and restaurants, and targeted support for energy-intensive industries such as ceramics.
Mr McMahon said: "It’s funded by closing the loophole where oil and gas companies use losses abroad to cut their tax bill here."
This increase in mileage rates marks the first adjustment in 15 years.
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