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The Approved Mileage Allowance Payments (AMAPs) scheme allows employers to pay tax-free mileage allowances to employees who use their own cars for business journeys, as long as the allowance paid does not exceed the approved amount.
Any amounts paid in excess of the approved amount are taxable and must be notified to HMRC on the employee’s P11D or payrolled.
The approved amount is found by the formula M x R
- M is the number of miles of business travel by the employee (other than as a passenger) using that kind of vehicle in the tax year in question; and
- R is the rate applicable to that kind of vehicle.
For 2019/20 the rates are as follows:
Cars and vans – 45p per mile for the first 10,000 business miles 25p per mile after that
Motor cycles – 24p per mile
Bicycles – 20p per mile