F&I Management & Training

THE Government is considering reducing the tax-free mileage reimbursement rates to drivers who use their own cars for company use, according to John Lewis, director general of the BVRLA.Lewis, who has worked closely with HM Treasury and HM Revenue & Customs during a long running review of the Approved Mileage Allowance Payments system, has predicted the basic rate of 40p a mile will remain in place, but only for the first 5,000 business miles each year. After that the rate will fall to 20p a mile.The current AMAP rates are 40p a mile for the first 10,000 mile and then 25p a mile thereafter.Speaking to representatives of the major leasing companies at a CAP Focus seminar, he said: ‘The Government’s aim is to cut the compensation available so that higher mileage drivers would be encouraged to use a smaller car.’Lowering the mileage threshold, but leaving the basic rate untouched, would also have the advantage of maintaining compensation rates to lower mileage drivers, such as local government and public sector workers - many of whom use their own cars for occasional business use.The Treasury said it would not comment on speculation about AMAP rates. A final decision on future AMAP rates is expected to be announced in the March 2008 Budget.

DATED: 08.11.07

FEED: HC