Increase The HMRC Mileage Rate From 45p/mile To 60p/mile Petition Failed To Get 100,000 Signatures

22nd July 2022

The petition to the UK government failed to get enough signatures to be put forward. Who knew it was even out there. It got 37,781 signatures. At 45p or less per mile workers and volunteers are subsidising the organisation. In Caithness HomeStart Caithness agreed to pay 50pence per mile.

The HMRC mileage rate for reimbursing the use of private cars (e.g. for employees but also volunteers) has been fixed at 45p/mile (up to 10,000 miles) since 2011. The lack of any increase since then is a serious disincentive to volunteer drivers particularly as fuel has gone up again recently.

Since 2011, inflation has gone up by over 25%; fuel has increased by over 20% over the last 5 years. Volunteer car drivers who did so much during Covid, and still do, to get people to healthcare settings, e.g. hospitals, vaccination centres, and to deliver shopping and prescriptions, are not being compensated fairly for the use of their cars. Consequently charities are struggling to recruit new volunteer drivers. These drivers help free up hospital beds and keep people independent and in their own homes.

Response
The AMAP rate is advisory. Organisations can choose to reimburse more than the advisory rate, without the recipient being liable for a tax charge, provided that evidence of expenditure is provided.

The Approved Mileage Allowance Payment (AMAP) rate aims to reflect running costs including fuel, servicing and depreciation. Depreciation is estimated to constitute the most significant proportion of the rate, with fuel constituting around a third of total costs included in the rate. In most cases, only a proportion of non-fuel costs can be attributed to business usage, and the AMAP rate takes this into account.

The current advisory rate is 45p/mile for the first 10,000 miles and 25p thereafter and applies to employees and volunteer drivers who use a private car for business mileage. The rate applies across all fuel types.

The AMAP rate is intended to create administrative simplicity by using an average. This means that the rate will be more appropriate for some drivers than for others.

The AMAP rate is advisory, and organisations are not required to reimburse at this level. It is ultimately up to the individual organisation to determine the rate of mileage reimbursement they offer employees or volunteers.

Organisations can agree to reimburse drivers the actual cost incurred, where individuals can provide evidence of the expenditure, without an Income Tax charge arising.

There are extraordinary global circumstances contributing to the sustained period of high fuel prices, among them the Russian invasion of Ukraine. At Spring Statement 2022 in response to fuel prices reaching record levels, the government announced a temporary 12-month cut to duty on petrol and diesel of 5p per litre. This cut represents savings for households and businesses worth around £2.4 billion in 2022-23.

As with all taxes and allowances, the Government keeps the AMAP rate under review.

HM Treasury