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Budget 2011: AMAP rate increase

  • Approved Mileage Allowance Payments up to 45p/mile
  • After 10,000 miles rate stays at 25p/mile
  • Volunteers can now claim 5p/mile for passengers

An AMAP rate increase for company car drivers was announced in 2011 Budget.

The tax-free mileage AMAP - or Approved Mileage Allowance Payments - reimbursement rate for workers using their own car for business mileage will go up from 40p to 45p per mile.

This applies only for the first 10,000 miles, with the hike taking place on April 6.

The first such increase since 2002, it promises to have a profound effect on how grey fleet drivers work out their own budgets.

After the 10,000 mile threshold the allowance will remain at 25p per mile.

Furthermore, an allowance for passenger payments currently in place for employees at 5p per passenger per mile will be extended to volunteers as well.

However, it's not all positive action for the Company Car Driver.

UK Commercial Director at GE Captial, Gary Killeen, doesn't think the rate increase will encourage more firms to switch to Employee Car Ownership (ECO) schemes: "The increase in AMAP rates from 40 to 45 pence is worth noting because it is the first such change in many years. 

"Consequently, it will help to protect companies that currently operate employee car ownership schemes from increasing fuel prices. However, the increase of 5p per mile only addresses the typical increase in fuel costs over a relatively short period and, therefore, we do not anticipate a surge in new entrants to ECO schemes."