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FOR all those small businesses out there using a private car for business – but no doubt funded by their own firm – what unusually welcome news: a rise in the Approved Mileage Allowance Payments (AMAPs) announced in the Budget yesterday.

Since 2002, the AMAP rate has sat there at 40p per mile for the first 10,000 miles for any business mileage in your private car.

In the meantime, fuel costs have spiralled so the cost benefit has dwindled alarmingly. AMAPs don’t just cover fuel – they cover all the associated business costs, too: business car insurance, wear and tear, depreciation, and so on.

The only way to keep track with rising fuel costs has been to choose a more economical car – surely the government’s intention. It’s certainly made me think eco driving every time I get in my Audi A6. But the 2.0-litre TDIe engine has been good: 43mpg average – but over 53mpg for longer journeys, which is still a brilliant result for such a big car. So the rise in AMAPs to 45p can only be a good thing,

Last night I was chatting to David Rawlings, the managing director of Business Car Finance. David’s business is aimed at helping small businesses and SMEs run their business cars more efficiently. David used to work for Deloittes, so he knows his stuff. And some. So it’s very good news that David – that’s him in the picture on the left – has joined our Ask the Experts team. I hope you make good use of his expertise.

“I think the increase in AMAPs is interesting for your readers,” David explained last night. “The last increase to AMAPs was in 2002 when the price of fuel was around 70p per litre; it’s now nearly 140p per litre. So it’s welcome, but it’s not a wholesale change in government thinking if you look at it in those terms. But, combined with the fuel duty decrease, it’s all welcome.”

You can use the new AMAP rates from 06 April 2011: for the first 10,000 miles they are 45p per mile; thereafter 25p per mile. This latter figure has not moved. If you use the AMAP figures, the payments are tax-free.

If you have a business car finance issue you want to ask David, you can find him here. Ask away on Ask the Experts.

ditor’s Blog on the Approved Mileage Allowance Payment increase

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