Employers can reimburse no more than the approved amount for business travel

The government has corrected an earlier statement that employers could reimburse actual amounts incurred in relation to business mileage free of income tax and National Insurance as long as they could show evidence of these costs. This is wrong: the exemption applies only if the payments do not exceed the approved amount for the vehicle.

In a written statement correcting its response to several parliamentary questions correspondence and a parliamentary e-petition on the subject of approved mileage allowance payments (AMAPs) from March to August 2022 the government said HMRC’s online guidance has been correct throughout - that employers cannot pay above the 45p a mile amount for a car. At the time many had asked the government to increase the pence per mile figure to reflect higher fuel costs.

The statement adds: ‘HMRC is also taking steps to bring this inaccuracy to the attention of...