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Employers cannot reimburse more than approved amount for business travel


Published: 13 Sep 2022 Update History

Government corrects previous statements on the amount that employers can reimburse in relation to business mileage for the use of the employee’s own car free of income tax and national insurance contributions (NIC).

Approved mileage allowance payments (AMAPs) provide a statutory exemption from tax for payments to employees who carry out business travel in their own cars, vans, motorcycles or cycles.

The government has issued a written ministerial statement to correct its responses to a number of Parliamentary Questions, correspondence and a Parliamentary e-petition on the subject of AMAPs from March to August 2022. Many of these asked the government to increase the pence per mile figure to reflect higher fuel costs.

The government has identified that it misstated the position when it said that employers could reimburse actual amounts incurred (income tax and NIC free), providing they could show evidence of these costs. This is technically inaccurate: the exemption only applies if the payments do not exceed the approved amount for the vehicle.

HMRC’s online guidance has remained consistent: that employers cannot pay above the 45p per mile amount for a car.

In the event that employers have reimbursed employees more than the approved amounts and need further guidance, please contact Peter.Bickley@icaew.com

Read more:

Written ministerial statement Written statements - Written questions, answers and statements - UK Parliament
HMRC guidance Expenses and benefits: business travel mileage for employees' own vehicles: Overview

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