Approved Mileage Allowance Payments: The case for change
The Bourne Agenda is a fortnightly blog brought to you by Bourne Business Consulting LLP, an independent tax and business consultancy with offices in London and Farnham.
For those of you who don’t know, Approved Mileage Allowance Payments (AMAPs) are tax free payments employers can make to employees who use their own vehicles for business travel (aka “the grey fleet”).
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The easier fix
Fixing the actual cost of motoring, then auditing that cost, is expensive in terms of manpower and is open to fraud.
Much easier would be for the typical costs of running a mid-range car to be worked out and the rates adjusted to reflect this. The employer would then not care whether the employee bought a budget vehicle and kept the extra cash, or travelled in luxuary in a top-of-the-range model at a higher cost. It's then only necessary to keep mileage records and saves a lot of arguments about whether the employee is buying too much petrol for a gas-guzzler!