Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent discussions he has had with HMRC on ensuring that travel reimbursement costs reflect the cost of travel in the context of rises in fuel costs.

Approved Mileage Allowance Payments (AMAPs) are used by employers to reimburse an employee’s expenses for business mileage in their private vehicle.

The government sets AMAP 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.

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

The government also sets Advisory Fuel Rates (AFRs) and the Advisory Electric Rate (AER) which are used when an employer reimburses an employee for business travel in a company car, or when an employee reimburses an employer for the cost of fuel used for private travel. These rates are also advisory.

The government keeps all taxes and allowances under review.