WHAT is MAR and how does it differ from AMAPs?
Good question. And all with plenty of acronyms thrown in too.
So here goes with the difference between Mileage Allowance Relief (MAR) and Approved Mileage Allowance Payments (AMAPs).
If you use your own car for business you should be aware of MAR to make sure you’re not paying too much tax
Where a cash allowance is offered in lieu of a company car and employees then use their own cars for business, a good number of them will not claim the Mileage Allowance Relief that is available to them.
You should be aware of this when you fill in your Self-Assessment tax return.
Mileage Allowance Relief allows employees to claim the difference between what they receive in business mileage or fuel costs from their employer and what is approved by HMRC.
The MAR rate is currently set at
- 45p for the first 10,000 business miles and
- 25p per business mile thereafter in the tax year.
And yes, that is the same as the AMAPs rate.
For example, 10,000 business miles compensated at 12p per mile by an employer will enable the employee to claim tax relief on the balance of 33ppm. For a 20% taxpayer this amounts to £660 a year – not an inconsiderable sum.
Jim Salkeld, owner of Premier Blue, is an expert in the field of car benefit schemes. He says;
“Although the MAR rates are the same as those used for AMAPs, the latter is not a relief but a limit to which an employer can pay for business miles without incurring tax or National Insurance Contributions.
“In other words, where AMAPs are paid in full as part of an Optimised Cash Scheme, there is no further relief available through MAR and employees do not have to worry about making annual claims.
“Of course, whether paying AMAPs or business fuel / mileage expenses it is essential that employers maintain proper records for both HMRC compliance and for employees to be able to claim MAR – this is something that we are more than happy to provide advice on.”
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Hi, I work for a family run cleaning company as a mobile cleaner, I use my own car and receive 30 pence per mile, I received this since September 2014, but I’ve recently found out it should be 45 pence per mile. Is this correct. Thank you.
Yes, that is correct. You can claim the difference via the mileage allowance relief on your tax return.
Ralph Morton, editor
Hi I have been told I have to claim my mileage annually not monthly is this right. I work as a home carer for an agency.
Lisa – you should claim you mileage tax relief annually. But you will need to keep a monthly record of your business miles.
Ralph Morton, editor
I have a company car and am only getting 11p a mile from my company. Can I claim back the difference between the business mileage rates 45p for 10,000 and 25p there after?
Hi Mark
I’m afraid not. The business mileage rates of 45p per miles for the first 10,000 miles are for drivers using their own cars on business use. These are known as AMAPs. Company car drivers use a different rate to avoid being taxed for ‘free fuel’. These are called AFRs. This is what your company is using to reimburse you.
Ralph Morton, editor, Business Car Manager
I work as a mobile advisor and travel from home to visit clients. My company policy states that I should deduct the mileage home to normal place of work for any travel to appointment, even if a different direction of travel. Can I claim the difference through mileage tax relief?
We asked our tax expert Colin Tourick for his opinion on this. This is what he has to say:
This is one of those situations where a chat with the local tax office would be advisable because any claim would need to be backed up with really good records.
If the journey is to a client near the employee’s normal place or work, such that the journey to the temporary workplace is substantially the same as the journey to the normal workplace, no tax relief is due because you can’t reclassify a journey that is very similar to commuting just because the destination happens to be a client’s premises.
If the journey is to a client some way away from the employee’s normal place or work and the employer makes the ‘commuting to work’ deduction, you should be able to make an argument to HMRC that the journey was wholly work-related, the employer didn’t reimburse you in full and therefore you should be entitled to tax relief on the difference.
But talk to the tax office first.
Colin Tourick, Colin Tourick & Associates
Hi
Please could you advise as to what I am required to do regarding MAR claims? I currently drive a provided company car but will change to a leased vehicle and self fuelled etc. I will be paid 11p per mile by my employer and I wish to claim the difference however I am unsure of how this is completed going forward.
Please help
Matt,
Assuming your change to a leased vehicle is to a personal lease – so you are taking care of the payments, insurance and so on – then you claim the difference on the business mileage you have been paid and the 45p AMAP figure on your annual tax return.
I hope this helps.
Ralph Morton, editor
I have a car leased via a PCP, my company pays an amount for business mileage and I know I can claim MAR for the difference, is this linked to the PCP car, or can it be used to offset mileage if I drove another car?
You can only claim the relief personally and the mileage is cumulative. So if you drove your PCP car for 5000 business miles and then another personal car 50000 miles then you can claim the MAR difference for 10,000 miles.
I hope that helps.
Ralph Morton – editor
Hi,
I use my own private car for work – my allowance is only 11pence per mile. Can I reclaim my fuel costs back as I’m doing 3000 miles a month and it’s costing me more than the company?
You can’t claim your fuel costs but you can claim the difference – ie 45p – 11p = 34p per mile for the first 10,000 miles; after that the MAR would drop to 13p.
Ralph Morton – editor
Hi there – I have a Limited company of which I am the director. I use my leased van for courier deliveries on behalf of Amazon delivering parcels. Amazon reimburses my company 12p mile: can I claim 33pm mileage allowance?
Yes you can – through the Mileage Allowance Relief
I get paid 34ppm after the first 50 miles for work; can I claim those first 50 miles, as well as the difference in rate?
Yes you can – Ed
How many years can you go back and claim for?
Contact the Inland Revenue – you will have to provide evidence of the mileage claims in previous years – Ralph Morton, editor
How do I go about claiming the difference between 40p that the company I work for that pay me for using my car for business use and the 45p that is the current going rate ?
Hello Patrick
You can do this on your self assessment tax return, or claim online. If you go to the HMRC site – Claim tax relief for your job expenses – and follow the instructions it will take you through the steps to claim online.
Ralph Morton, Editor
I have a car allowance taxed at source and a company fuel car allowing both private and company use. I appreciate that the compay are paying my fuel for my company mileage but wondered f I could claim any tax relief on ‘wear and tear’ and depreciation on the business mileage?