Six in ten homecare providers reimburse mileage at 40p a mile or less, and one in twenty pay nothing at all, according to the Homecare Association’s July 2026 fuel survey. HMRC’s approved rate has been 55p since 6 April 2026. A carer doing five calls across town, driving between every one, is buying fuel at today’s prices and being paid back well under the approved figure. And unsurprisingly, they feel the effect, even when the payslip doesn’t make the gap obvious.
Under-reimbursement is a problem in its own right. But there’s a second, less visible one that sits behind the same travel line on the payslip, meaning an agency can lift its mileage rate to a level it can fully defend and still be exposed.
Two obligations behind one payslip line
The two exposures sit side by side on the payslip, but they answer to different rules and need to be handled separately:
- The mileage rate:
How much you pay per business mile. HMRC’s approved rate is the ceiling you can pay tax-free, not a rate you are obliged to pay. Anything below it is a commercial decision, and the carer can claim tax relief on the difference, so the cost of a low rate is goodwill and retention rather than a penalty. What you do need is to show the rate was set deliberately, applied to every claim in the same way, and recorded claim by claim. That record is what you’ll be asked for if a carer or an auditor ever challenges it. - The travel-time obligation: time a carer spends driving between calls counts as working time under HMRC’s minimum wage rules. Total pay for the pay reference period, divided by total hours including that travel, has to average at least the National Living Wage, £12.71 an hour for workers aged 21 and over from April 2026.
One is priced by distance, and the other by hours. Because they’re governed by different rules and paid through different routes, a single travel line can settle one completely while the other stays open.
Why does raising the rate only fix half of the problem?
When someone flags under-reimbursement, the obvious response is to move the per-mile rate up. That works for the mileage side of the equation, but not the travel time.
That’s because travel time is a payroll question about which hours you count and pay, not a mileage question about distance.
If the twenty minutes between call three and call four never reaches the timesheet, the carer’s hourly pay for that shift is overstated and the NMW position is wrong, whatever the per-mile figure. Mileage payments don’t rescue it either: expense reimbursements are excluded from pay when the minimum wage is calculated. A generous mileage rate can make the whole travel arrangement look resolved when only one half of it is.
Getting the mileage side clean and auditable
Mileage exposure is the one that can be managed with the right process and a spend tool to enforce it. Set one rate, apply it to every claim without exception, and keep a record of what was paid on each claim so the rate can be evidenced rather than reconstructed.
With Moss you can handle that administration. It applies whatever rate you set, calculates and pays each claim, and holds an audit trail per claim, so you can show what was reimbursed and at what rate. Moss applies the rate you choose rather than deciding it, and it won’t close the funding shortfall that keeps agency rates below the approved figure in the first place.
Travel time is the limit on the other side, and that obligation lives in payroll, not in the reimbursement flow. That means a mileage tool won’t resolve it. The fix there is procedural and involves making sure between-call driving is captured as working time on the timesheet, then checking that total pay for the period, divided by total hours including that travel, clears £12.71.
Seeing both problems clearly
Part of the value in cleaning up mileage is that it separates the two problems. Once mileage is one rate, applied to every claim and fully auditable, nothing in the reimbursement flow is masking the travel-time question, and it can go to payroll as the distinct item it is.
