Approved Mileage Rates – Review
Chancellor Rachael Reeves recently announced that there is to be a review of the Approved Mileage Allowance Payment (AMAP) rates, “ahead of a future budget”, as expected this was welcomed by many but a more definite or earlier time frame would have been more beneficial given this is something that many employers and motoring industry representatives like the RAC have long campaigned for.
The current rates in force are:
| From tax year 2011 to 2012 onwards | First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year |
| Cars and vans | 45p | 25p |
| Motor cycles | 24p | 24p |
| Bicycles | 20p | 20p |
These amounts ensure that employers can reimburse business miles using the relevant rate per mile but if we consider the fuel prices at the pump which even more so in this present climate, this has fallen short for many years.
For those workers that are heavily reliant on their cars to fulfil their duties, the review will seek to redress some of the financial burdens attributed to cost of living and takes the view that those in lower paid sectors such as carers are disproportionately shouldering some of these business charges when comparing the pump prices to the AMAPs.
Whilst it is certain that the review is well overdue, there is no guarantee that this will lead to any increases in these rates, this is something we will have to wait to see. With the extended freeze on fuel duty set to end September 2026, the timing of the review is considered in this regard.
Chancellor Rachel Reeves commented:
“While the approved mileage allowance payment rates have not changed since 2011, I recognise that motoring costs have evolved significantly, and it is an important issue for many people who claim motoring expenses. We are, therefore, looking at the issue and will consider the matter further in the usual way, as part of a future fiscal event. Through steps such as freezing fuel duty, we are taking wider action in the meantime to ensure that people pay the lowest price possible at the pump, whether or not they use the approved mileage allowance payment”.
Labour MP Jim, Macmahon commented:
“I thank the Chancellor for that response; I welcome it, and so will millions of working people. This has been a long-standing campaign for Unison, and I am grateful to it and the RAC Foundation for taking on this case and to the Mirror for the coverage it has given to the campaign. The 45p a mile rate, set 15 years ago, is nowhere near the true cost of running a vehicle today, which was recently assessed at 67p a mile—and that was before fuel costs rocketed in the last week”.
There is no doubt that many will be watching closely for future developments in this regard!