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Employers understand Approved Mileage Rates (AMR) for business travel. Employees are familiar with the system as well. The Government last raised rates in the 2011-12 tax year. Now, as we know, vehicle fuel and maintenance costs are increasing apace. However, there’s no indication of any change to AMRs soon. So, is there an alternative to Approved Mileage Rates?


AMR for cars

Currently, the AMR is 45p per mile for the first 10,000 miles. Importantly, this covers more than the cost of fuel. The approved rate also contributes to general motoring expenses. Employees benefit from help with maintenance, insurance and breakdown cover.


Easy to operate

Of course, there’s a major benefit to the AMR system. It’s relatively easy to operate. Directors and employees simply need to record their business mileage. Everyone appreciates how much they will receive in expenses. The sum is not affected by the type of car. The amount of fuel used is irrelevant. As is the way someone drives.


Costs outside AMR

As you’d expect, some costs fall outside the scope of Approved Mileage Rates. They include tolls, parking charges and speeding tickets. That said, the employer can refund these costs as general business expenses.



So, if you’re looking for an alternative to Approved Mileage Rates, what are the options? Employers could increase the per mile payment. But consider this carefully. Reject the AMR and employees can’t claim a proportion of motoring costs.


Claiming fuel costs only

On the other hand, employers could reimburse fuel alone. To calculate these costs, ensure all records include total private mileage as well as business travel. By way of comparison, check the advisory fuel rates for unleaded petrol and diesel company cars. You’ll find them at https://www.gov.uk/guidance/advisory-fuel-rates. These rates provide an average of the fuel that a company car user should receive for business use. They also highlight what someone must repay for private use to avoid a fuel benefit charge.


Advisory fuel rates

For example, stated pump prices are 1.65/ litre petrol and £1.79/litre diesel. HMRC published the latest advice on 22 June 2022. It’s already out of date. Let’s take cars under 2000cc. The average petrol cost is 14p or 17p per mile. For vehicles over 2000cc it’s 25p per mile. There is no adjustment for hybrid cars.


Consider annual mileage

Yet, there’s another point to take into account. The employee’s annual mileage. What if someone drives over 10,000 business miles a year? Then, the AMR is restricted. It’s 25p per mile for mileage above 10,000 miles.


Alternative to Approved Mileage Rates

There’s no denying it, the system costs employers more. Yet, in our opinion it works well. There’s currently no benefit in switching from Approved Mileage Rates.