PARLIAMENTARY WRITTEN QUESTION
Mileage Allowances (23 January 2023)

Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee’s expenses for business mileage in their private vehicle.

The government sets the AMAP rates to minimise administrative burdens.

Employees can claim up to 45p per mile for the first 10,000 miles and the 25p per mile for subsequent miles. The mileage thresholds reflect that the AMAP rates are designed to cover both a proportion of fixed costs, such as insurance and VED, as well as ongoing costs such as fuel.

Employers are not required to use the AMAPs rates. Instead, they can agree to reimburse a different amount that better reflects their employees’ circumstances. If an employee is paid less than the AMAP rate, they can claim Mileage Allowance Relief (MAR) on the shortfall. However, where payments exceed the relevant AMAP rate, there may be a tax and National Insurance charge on the difference.

Self-employed people can choose to use the simplified mileage rate, or they can claim tax relief using capital allowances and actual expenses.

As with all taxes, the Government keeps the AMAP rate under review and any changes are considered and announced at fiscal events.