Mileage Rates
What is Approved Mileage Allowance Payment?
Approved Mileage Allowance Payment (AMAP) is a tax-free payment for drivers who make business trips using their own vehicle. It applies to business journeys made by car, van, motorcycle or bicycle.
AMAP is intended to cover the employee’s mileage related business expenses. This includes fuel, servicing, tyres, car tax, insurance and depreciation. It also covers the interest on any loans taken out to buy the vehicle.
HMRC "mileage claim" guidelines state the AMAP rate is the maximum that can be claimed tax-free.
How do I calculate AMAP?
For journeys made by car or van, the mileage allowance payments are a flat rate of 45 pence per mile for the first 10,000 miles. Mileage allowance payments are 25 pence per mile after the 10, 000 mile threshold.
For journeys made by motorbike the mileage rate is 24 pence per mile, regardless of mileage. For journeys made by bicycle the AMAP is 20 pence per mile, likewise regardless of mileage.
As long as the mileage payments do not exceed the AMAP limits, these payments are free of income tax and national insurance.
How is AMAP paid?
The approved mileage rate can be paid by the employer directly to the driver of the vehicle.
If the employer pays less than the approved mileage rate, the shortfall can be claimed against the driver’s income tax. However, it can only be offset against income tax paid on earnings from this employer.
How do I claim AMAP?
AMAP can be claimed directly from your employer, or it can be claimed as an expense on your tax return.
The HMRC (formerly Inland Revenue) requires accurate records to be kept of the business trips. These should include:
- The date of travel;
- The reason for the journey;
- The miles covered;
- The type of transport used.
You can use Tripcatcher mileage log to log your business miles and track your mileage expenses: just click the Sign Up link at the top of the screen. You can also use a mileage log book or a spreadsheet.
It does not matter how many different cars or vans you drive during the year; they are all treated as the same vehicle. However, claims for travel by motorbike and bicycle must be kept separate from claims for journeys by car or van.
Can I claim for passengers?
If the passengers are employed by the same employer as you, then you can claim an additional five pence per mile, per passenger. However, you must be driving a car or van. You cannot claim for carrying passengers on your bicycle or motor bike.
Do I have to take the most direct route to claim?
No, you can use whatever route seems sensible. For example, on journeys near London, it might be quicker to take the M25 around London, rather than travelling through the centre.
Can I claim AMAP for commuting to work?
No. The commute to work is not considered a business journey.
HMRC defines a commute as the journey you make between your home and permanent workplace. To be considered a valid business trip, the journey must be from one workplace to another, for the purpose of work.
