Author: Ralph Morton
- Make sure you are up to date with the mileage rates you can claim for using private cars on business trips. These are known as the Approved Mileage Allowance Payment rates (or AMAPs). They are tax free and worth 45p per mile.
MANY companies reimburse employees who use their own private car for company business.
Usually this is done using an approved business car mileage rate.
Alternatively, you might be self-employed, or run your own small business, and use your private car for the occasional business trip. Again you can cover your business motoring costs using statutory mileage rates set by the tax man. They are known as Approved Mileage Allowance Payments. This is often abbreviated to AMAPs.
Here’s how it works. Using AMAPs you may reimburse an employee, or yourself, up to the amount shown below and the employee (or you) will not be liable for tax on it.
The statutory mileage AMAP rates from 06 April 2011
- Up to 10,000 miles: 45p per mile 10,000 miles or more: 25p per mile
The statutory mileage AMAP rates are the same for all cars, irrespective of engine size. For smaller cars, they are quite generous. But they may not cover the costs for larger vehicles.
The government wants to encourage drivers into more fuel-efficient vehicles – and reduce the UK’s carbon dioxide (CO2) emissions.
AMAPs are higher for the first 10,000 miles per year to reflect standing annual costs of motoring, such as road tax, insurance and depreciation. For every subsequent mile, the mileage rate is lower. This is also to discourage unnecessary business mileage, which is another part of the government’s drive to reduce CO2 emissions. Passengers can be claimed for at an additional 5p per mile.
If you pay an employee a lower mileage rate than those in the AMAP table above, the employee can claim tax relief on the difference in their annual return (which is known as Mileage Allowance Relief).
AMAPs can also be paid for using a motorbike on business (24p per mile) and cycling on business (20p per mile).
AMAPs cannot be claimed for each separate car: they are cumulative for the person claiming them – so you cannot claim 10,000 miles in car 1 at 45ppm and then another 10,000 miles in car 2 at 45ppm.