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<p>Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse
an employee’s expenses for business mileage in their private vehicle. The government
sets the AMAP rates to minimise administrative burdens.</p><p> </p><p>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>There is no formula or calculation which delivers the AMAPs rates for cars
of 45 pence per mile for the first 10,000 miles and 25 pence per mile thereafter.
The decision on what rates to adopt is a policy decision taken by the Chancellor after
considering a range of factors. These factors include:</p><p>• the costs of motoring
per business mile for a range of cars and mileages;</p><p>• the transport needs of
business;</p><p>• the cost to the Exchequer of changing the rate;</p><p>• the overall
fiscal position.”</p><p> </p><p>Employers are not required to use the AMAPs rates.
Instead, they can agree to reimburse a different amount that better reflects their
employees’ circumstances. If an employee is paid less than the AMAP rate, they can
claim Mileage Allowance Relief (MAR) on the shortfall. However, where payments exceed
the relevant AMAP rate, there will be a tax and National Insurance charge on the difference.</p><p>
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