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<p>The Government sets the Approved Mileage Allowance Payments (AMAP) rates to minimise
administrative burdens. The AMAP rates aim to reflect running costs including fuel,
servicing and depreciation. Depreciation is estimated to constitute the most significant
proportion of the AMAP rates.</p><p> </p><p>Employers are not required to use the
AMAP 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.</p><p> </p><p>Alternatively, they can choose to pay a different mileage
rate that is higher or lower than the AMAP rates. If an employee is paid less than
the approved amount, they are allowed to claim Mileage Allowance Relief (MAR) from
HMRC. However, if the payment exceeds the relevant AMAP rate, and this results in
a profit for the individual, they will be liable to pay Income Tax and National Insurance
contributions on the difference.</p><p> </p><p>As with all taxes and allowances, the
Government keeps the AMAP rates under review and any changes are considered by the
Chancellor.</p>
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