The Government has said that the rates used to pay drivers for using their own car on company business, will rise to 45 pence per mile for the first 10,000 miles and remain at 25 pence per mile thereafter, with effect from 6 April 2011.

Under the changes, the allowance for passenger payments currently used by business employees will also be extended to volunteers, for example charity workers. This stands at 5 pence per passenger per mile.

This is the first revision of the rates since 2002.