Unison said the Government has failed to update the national car mileage rates for employees who use their own vehicles for work, with rising costs leading to some workers calling in sick because they can’t afford the costs.

Every year workers are £6,000 worse off because the rate, set by HM Revenue and Customs (HMRC) has remained at 45p for more than 10 years, the union together with the RAC Foundation revealed.

The HMRC Approved Mileage Allowance Payment (AMAP) is paid out by employers to help workers who need to use their car for work. Unison said it should now be at 63.4p because of soaring inflation and higher driving costs.

The AMAP applies across all types of fuel, is tax-free for the recipient, and has been at the same rate since 2011. It is 45p for the first 10,000 miles and 25p for anything over this.

One in five public sector workers drives to work yet Unison said it has seen examples of staff who are using their annual leave or calling in sick because they can’t afford the petrol to drive to work.

Some employees have also had to sell their cars to cover the cost of everyday essentials or utility bills and are now using public transport to visit the people they care for. Yet public transport takes longer and this means they are unable to visit as many people.

Employers have discretion to reimburse employees more than this advisory rate but earlier this year tax campaign group, the Low Incomes Tax Reform Group (LITRG), warned that “well-meaning” employers acknowledging the cost of living burden on employees who were starting to pay or reimburse business mileage above the HMRC approved amount could actually land their workers with an extra tax bill or impact Universal Credit awards.

‘Out of pocket for going to work’

Unison is also calling for a fleet of electric vehicles for public sector workers to use if they have to and more money to be given to local authorities to pay for these.

Unison general secretary, Christina McAnea, said: “Mileage rates are woefully out of date. No one should pay a penalty effectively for doing their job, least of all those providing vital services.

“Petrol prices have skyrocketed. Care workers, nurses and other frontline employees can barely make their incomes stretch to cover the basics, let alone the costs of using their vehicles for work.

“The Government must tackle low pay now, not threaten to hold public sector wages down. Essential staff shouldn’t be out of pocket for going to work. A failure to act now risks worsening the already dire staffing crisis.”