The Approved Milage Allowance Payment rates are used to reimburse employees for the costs of using their own vehicles for business journeys.
Since 06 April 2011, the rates that can be paid free of an Income Tax liability have been unchanged as follows:
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First 10,000 miles
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Above 10,000 miles
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Cars / vans
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45p
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25p
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Motorcycles
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24p
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24p
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Cycles
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20p
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20p
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Passenger payments
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5p
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(for National Insurance relief purposes, there is not a 10,000 per tax year cap and all miles are paid at the AMAP rate (45p or 24p or 20p)). Where the employer reimburses over the approved rates, the excess is subject to:
- Income Tax which may be declared on the P11D or collected via the payroll; and
- National Insurance (Class 1) which must be collected via the payroll
On 25 March 2026, HM Treasury announced that these are going to be reviewed and will ‘focus on people who rely on their car to do their job, ensuring they are not left out of pocket’.
For Bookkeepers
It is welcome to see the Exchequer Secretary to the Treasury say a review of these rates is long overdue. They have not changed for 15 years yet motoring costs have changed. However, it is out of the ordinary to have a review outside of a UK Budget cycle and the possibility rates may change on a date other than 06 April, though recent world events have made this necessary.
It is worthwhile pointing out that, historically, the purpose of the AMAPs are not just fuel costs but also:
- Expenses associated with running vehicle (car, van etc), for example, Vehicle Excise Duty, repairs and depreciation; plus
- Delivering the UK Government’s environmental objectives
