As you may be aware there is a statutory system of tax and NIC free mileage rates for business journeys in an employee’s own vehicle. These mileage payments are known as ‘Authorised Mileage Allowance Payments’ (AMAP).

The statutory rates for the current tax year are:

	Rate per mile
Up to 10,000 miles	40p
Over 10,000 miles	25p

Employers can pay up to the statutory amount without generating a tax or NIC charge. Where employers pay less than the statutory rate (or make no payment at all) employees can claim tax relief on the difference between any payment received and the statutory rate.

The Chartered Institute of Taxation (CIOT) has asked the government to look again at the level of AMAP as the rates have remained unchanged since 2002. The AMAP rates are designed to cover the full cost of the business travel, which includes depreciation of the vehicle, servicing and insurance costs. Fuel is clearly a major part of the costs and with the significant increases in fuel prices recently the rates should perhaps be reconsidered.

Colin Ben-Nathan, Chairman of the CIOT’s Employment Taxes Sub-Committee, said:

‘We ….. suggest that with the recent significant increase in fuel costs it is time for Ministers to look again at the statutory AMAP rates of 40p/25p per mile for those using their own cars for business travel.’

Internet links: CIOT article

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