Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 19 May 2022 to Question 2690, on Voluntary Work: Car Allowances, whether his Department plans to extend the tax free limit on Approved Mileage Payment Allowance for volunteer drivers in the context of rising fuel costs.

The Government sets the Approved Mileage Allowance Payments (AMAPs) rates to minimise administrative burdens. AMAPs aim to reflect running costs including fuel, servicing and depreciation. Depreciation is estimated to constitute the most significant proportion of the AMAPs.

Organisations are not required to use the AMAPs. Instead, they can agree to reimburse the actual cost incurred, where volunteers can provide evidence of the expenditure, without an Income Tax or National Insurance charge arising.

Alternatively, they can choose to pay a different mileage rate that better reflects their volunteers’ circumstances. However, if the payment exceeds the amount due under AMAPs, and this results in a profit for the individual, they will be liable to pay Income Tax and National Insurance contributions on the difference.