MILEAGE PAYMENTS - 20.09.2022

Mileage payments - government clarifies

AMAP. The approved mileage allowance payment (AMAP) rates have been frozen at their current level since 2010. Your clients are probably well aware that they can reimburse their employees for business travel undertaken in their own cars at 45p per mile for up to 10,000 miles in a tax year, and 25p per mile above that with no income tax consequences.

Pro advice. There are different AMAP rates for motorcycles and bicycles of 24p and 20p respectively.

Payments of up to 45p per mile also have no NI implications for the employee; however, if more than 10,000 miles are paid at this rate, the mileage will be a taxable benefit in kind, and so will attract Class 1A NI via the Form P11D .

Campaign. In the wake of increasing fuel costs, some groups have been lobbying the government to increase the rates. It responded by saying that employers could reimburse actual amounts incurred (income tax and NI free), providing they could show evidence of these costs. However, it has since clarified that this was misleading, as it only applies to volunteer drivers.

Pro advice. For the avoidance of doubt, advise clients that they should not pay employees above the AMAP rates.

Company. In related news, the advisory fuel rates for mileage undertaken in company-provided vehicles changed from 1 September 2022 as follows: