Employees’ Mileage
Payments
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.’
It will be interesting to see if the government
makes any changes to the rates. We will of course
keep you informed.
Internet Links:
CIOT
article |
