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Approved mileage allowance payments: regulations

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The Approved Mileage Allowance Payments (Rates) Regulations, SI 2011/896, increase the higher rate of AMAPs for cars from 40 to 45 pence per mile for the first 10,000 of business travel in an employee’s private car or van.

HMRC accept that there is no taxable profit where AMAP rates are used, and the employer may reimburse the employee without the need for detailed record keeping. The increased rate will apply from 6 April 2011.

The 25p rate applying to travel in excess of 10,000 miles remains unchanged. The current 5p per mile allowance for passenger payments will be extended to volunteers, HMRC said.

AMAP rates have not been changed since April 2002 when they were first introduced. Consultation in relation to this measure, announced in the Budget, was ‘not appropriate’, HMRC said in an explanatory note.

But in a ‘pro-active’ submission to David Gauke earlier this month the CIOT pointed out that AMAP rates no longer reflected the costs of motoring, which had have risen significantly since the rates were set.

Employees, the CIOT said, were now ‘effectively subsidising their employers’. The tax body recommended that the rates be increased to ‘50p per mile for the first 10,000 miles and 35p per mile for mileage in excess of that’.