7 May 2024
Mileage and Fuel Rates and Allowances

The Government sets the Approved Mileage Allowance Payments (AMAPs) rates, which are used by employers to reimburse an employee’s expenses for business mileage in their vehicle. AMAP rates are intended 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.

Employees can claim up to 45p per mile for the first 10,000 miles and 25p per mile for subsequent miles. The mileage thresholds reflect that the AMAP rates are designed to cover both a proportion of fixed costs, such as insurance and VED, as well as ongoing costs such as fuel.

Employers are not required to use the AMAP rates. Instead, they can agree to reimburse a different amount that better reflects their employees’ circumstances. Where payments exceed the relevant AMAP rate, there will be an Income Tax and National Insurance charge on the difference. It is therefore ultimately up to employers, including individual public sector organisations, to determine the rate at which they reimburse their employees.