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 link:
CIOT article |
