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Car Allowances: Care Workers

Question for Treasury

UIN 143825, tabled on 21 March 2022

To ask the Chancellor of the Exchequer, what assessment his Department is making on the potential merits of adjusting Care Workers Mileage Tax Rebates in light of increasing petrol prices.

Answered on

28 March 2022

The Government sets the Approved Mileage Allowance Payments (AMAPs) rates to minimise administrative burdens. AMAP rates aim to reflect running costs including fuel, servicing and depreciation. Depreciation is estimated to constitute the most significant proportion of the AMAP rate.

Employers 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 care workers’ 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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