Community First Yorkshire recently launched a survey exploring the potential impact of HMRC’s increase in the approved mileage reimbursement rate to 55p per mile.

The survey was launched following concerns from organisations about balancing fair reimbursement for staff and volunteers with the financial pressures facing the sector.

Key findings

• Most respondents were medium to large organisations, with nearly 30% reporting more than 100 staff and regular volunteers.
• The majority operate in rural or countywide areas, where travel is essential for service delivery.
• Almost two-thirds (64.7%) currently reimburse mileage at 45p per mile, while only 11.8% currently pay 55p.
• Travel is a significant operational cost, with over 80% of organisations describing it as a moderate or major area of expenditure.
• Nearly one-third of respondents estimated that moving to a 55p rate would increase annual costs by between £10,000 and £25,000.

Impact on Organisations

More than half of organisations said absorbing the additional cost would be difficult, very difficult or unsustainable. Rather than simply meeting the increased costs, many indicated they would need to:

• Reduce spending in other areas;
• Review staffing levels or volunteer activity;
• Reassess how services are delivered.
• Impact on Communities.

Around 64% of respondents believe higher travel costs would have a moderate or significant impact on service delivery. The areas most likely to be affected include:

• Outreach and community engagement activities;
• Attendance at meetings and partnership events;
• Services delivered in rural areas.
• Rural communities were identified as the group most likely to be disproportionately affected by any reduction in travel-related activity.

Overall Message

The survey highlighted the challenges that many VCSE organisations face in maintaining fair mileage reimbursement while operating within increasingly constrained budgets. While organisations recognise the importance of supporting staff and volunteers with travel costs, any move to a 55p reimbursement rate could create significant financial pressures and potentially impact service delivery, particularly in rural communities.