AA published 2010 motoring costs

18 November 2010

Employers can reimburse employees who use their own cars for business at the HMRC approved mileage rates without any need to return details of amounts paid on the P11D. However, any amounts paid in excess of the approved rates is taxable and must be returned on the P11D. For cars, the approved mileage rate is 40p for the first 10,000 miles and 25p for subsequent miles. The rates have remained unchanged since the introduction of the approved mileage allowance payments (AMAPs) scheme from 6 April 2002.

However, the latest AA motoring costs survey, which is available on the AA website, shows that for all cars, actual running and standing costs per mile exceed the approved rates. Where actual costs exceed the approved rates, employees can claim a deduction  for the amount not reimbursed, providing the actual costs can be substantiated. Employers can also seek dispensations based on the higher actual costs.

If the approved mileage allowance payments system is to work as intended, perhaps is about time HMRC revised their rates to take accounts of fuel and other cost increases since April 2002.

Approved mileage rates are available on the Tax Data pages of the website.