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HMRC internal manual

Employment Income Manual

Dispensations: authorised mileage allowance payments

 

The guidance on this page applies for the tax years up to and including 2015-16.  For tax years 2016-17 onwards dispensations have been replaced by an exemption for amounts which would otherwise be deductible. See EIM30200 onwards.

Dispensations and authorised mileage allowance payments (AMAPs)

There is a statutory exempt amount (see EIM31240) that employers can pay to employees using their own vehicle for business travel - these payments are known as authorised mileage allowance payments (AMAPs). Where the total payments an employer makes do not exceed the amount of the exempt AMAP for a given number of business miles, dispensations will no longer be necessary. The payments are statutorily exempt from tax and there is no requirement for the employer to make a return to the Inland Revenue, but the employer will still need to keep records of the payments made and business journeys to which they relate.

Where the payments exceed the amount of the AMAP, the excess over the AMAP is automatically chargeable to tax and will not qualify for a dispensation. The employer will only need to report the excess over the AMAP.

Dispensations for business mileage cease from 6 April 2002

Consequently from 6 April 2002 any dispensation, or part dispensation, that related to payment of expenses for business travel in an employee’s own vehicle ceased. Where a dispensation also covered other items these will not be affected and the rest of the dispensation will remain in force.

These changes do not affect dispensations for business mileage payments (normally based on fuel costs) to employees with company cars.