This tax-free rate for cars is currently set at 45p per mile for the first 10,000 business miles and 25p thereafter.
The AMAP rate is the same, irrespective of the fuel type, and so can be paid to employees who drive EVs as well as petrol or diesel cars.
The AMAP rate is higher than the business mileage rates paid to company car drivers as it also considers the increase in the ownership costs that the employee incurs, beyond just the fuel, for using their own car for business mileage.
These include:
- Servicing and maintenance (including the MOT) and any repairs
- Business cover on their car insurance
- Wear and tear
- Depreciation
Whilst AMAP is the approved tax-free amount, as with the other business mileage rates, the business can still choose how much to reimburse employees.
If a lower rate than AMAP is paid, then the employee can claim mileage allowance tax relief for the difference at the end of the tax year.
Similarly, if the business pays more than the AMAP rate, then the difference will be subject to taxation.
Self employment
If you are self-employed and use your private car for business trips you can also use the AMAP rates. However, you cannot use AMAP rates AND write off a percentage of running costs and fuel against tax.
