Mileage Allowances

Treasury written question – answered at on 29 February 2024.

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Photo of Jim McMahon Jim McMahon Shadow Minister (Levelling Up, Housing, Communities and Local Government)

To ask the Chancellor of the Exchequer, what component costs were used to calculate the HMRC mileage rate in 2010; and if he will make the equivalent calculation based on today's costs.

Photo of Gareth Davies Gareth Davies The Exchequer Secretary

Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee’s expenses for business mileage in their private vehicle; and by self-employed drivers to claim tax relief on business mileage. The rates for cars are 45 pence per mile for the first 10,000 miles and 25 pence per mile thereafter.

The rates are arrived at after considering a range of factors including:

• the costs of motoring per business mile for a range of cars and mileages;

• the transport needs of business;

• the cost to the Exchequer of changing the rate; and

• the overall fiscal position.

The AMAP rates are not mandatory, and employers can choose to pay more or less than the AMAP rate. It is therefore ultimately up to employers to determine the rate at which they reimburse their employees. Like all taxes and allowances, the Government keeps the AMAP rate under review as part of the annual Budget process.

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