Employees Move Back To Company Cars

Wednesday, 29. October 2008

Finally it would seem that fewer people are using private cars for business since the Government chose not to adjust the Approved Mileage Allowance Payment (AMAP) in line with increasing running costs especially the increase in fuel costs. The rates are still set at 40 pence per mile for the first 10,000 miles and 25 pence per mile thereafter, tax and NI free. This rate was set six years ago and has not been adjusted since. From a health and safety point of view this may not be a bad thing as drivers opt for company cars rather than use their own which are usually less environmentally friendly than a brand new company car. According to estimates the cost of running the average car for 10,000 miles is £6,300, not £4,000 as is being allowed at the moment. It is expected that the Chancellor will include an adjustment to AMAP in the October pre-budget report but it is unlikely to match the estimated cost of 63 pence per mile. Graham Hill