Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of increasing the tax free mileage allowance in the context of rising fuel prices.
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 use a different mileage rate that better reflects their employees’ circumstances. However, tax is charged on any payment received by employees which exceed the AMAPs rate.
The Government keeps this policy under review.