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Car Allowances

Question for Treasury

UIN 138293, tabled on 11 March 2022

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of increasing the amount that employees can claim in fuel costs per mile in tax relief from 45p in the context of the recent increase in fuel costs.

Answered on

21 March 2022

The Government sets the Approved Mileage Allowance Payments (AMAPs) rates to minimise administrative burdens.

Organisations are not required to use the AMAPs rates. Instead, they can agree to reimburse the actual cost incurred, where individuals can provide evidence of the expenditure, without an Income Tax or National Insurance charge arising.

Alternatively, they can choose to pay a different mileage rate that better reflects their employees’ circumstances. However, if the payment exceeds the amount due under AMAPs, and this results in a profit for the individual, they will be liable to pay Income Tax and National Insurance contributions on the difference.

The Government keeps this policy under review.

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