Measure
From 6 April 2027, the Approved Mileage Allowance Payment (AMAP) rate for business mileage over 10,000 miles in a tax year will increase from 25p/mile to 35p/mile. The AMAP rates are the maximum approved rates that can be reimbursed for business mileage in a private car without triggering an Income Tax liability. It was also confirmed that the 55p/mile rate for business mileage up to 10,000 miles in a tax year is now permanent.
Employers making mileage payments and employees using their private cars for business journeys, particularly those travelling more than 10,000 business miles a year.
The change takes effect from 6 April 2027.
The higher rate for mileage above 10,000 miles will be welcome for employees who make substantial business use of their own cars and should help deal with the challenge of rising motoring costs. In practice, however, many employers set their mileage reimbursement rates below the AMAP rates; often, reimbursement is aligned to company car advisory rates to manage cost and simplify administration. Where this is the case, employees will not feel the impact of the increase in the AMAP rates immediately. However, the change will increase the value of any income tax Mileage Allowance Relief (MAR) and National Insurance relief due. These reliefs can benefit employees without increasing employer costs.