CIOT: Authorised mileage allowance payment rates: Ministers asked to look again
The Chartered Institute of Taxation (CIOT) is asking Government Ministers to look again at the Authorised Mileage Allowance Payment Rates (AMAP).
The AMAP rates have been unchanged since 2002, and are intended to provide a statutory exemption from tax for payments from employers to employees who use their own vehicles for business travel. Although the AMAP rates are designed to cover the full cost of the business travel (including, for example, the depreciation of the vehicle), the cost of fuel is a significant component of that cost and the fuel cost has recently increased markedly.
The increased cost of fuel was recognised by HMRC when increases to the advisory fuel rates (AFRs) were announced recently. AFRs are for use where employers either reimburse employees for the cost of fuel for business travel in their company cars or require employees to repay the cost of fuel used for private travel. We were also pleased to note that, in response to the recent rapid increase in fuel prices, the new rates can be applied for journeys from 1 June.
Colin Ben-Nathan, Chairman of the CIOT’s Employment Taxes Sub-Committee, says: “We welcome the changes made in relation to the AFRs but would 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.”
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For press information contact Simon Goldie on 020 7245 4122 (direct line), 07879 497316 (mobile). Email sgoldie@ciot.org.uk
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