mileage allowances?
A survey by consultancy group Fleet Audits has found that many
employees make a profit out of business mileage – despite recent
claims to the contrary.
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The finding has been made public shortly before the 2008 Budget
statement, in which chancellor Alistair Darling is expected to
announce sweeping changes to the way that tax-free Authorised
Mileage Allowance Payments (AMAPs) are made.
Business drivers can currently claim 40p per mile for the first
10,000 business miles, and 25p per mile thereafter – a sum that
chairman of employee car ownership scheme provider Provecta,
Nick Sutton recently criticised for not reflecting the true cost of
motoring following sharp increases in the price of fuel.
However, Fleet Audits stated that “for the overwhelming majority
of people claiming mileage reimbursement through the AMAP system,
the cost of running their vehicle is materially less than 40p per
mile.”
Fleet Audits found that a two-year-old lower medium petrol car –
such as a Ford Focus or a Vauxhall Astra – costs in the region of
25p-27p per mile to run over a three-year, 45,000-mile cycle,
including 18,000 business miles in that period, even after
depreciation, funding, fuel, insurance, maintenance and Vehicle
Excise Duty have been taken into account.
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By GlobalDataMeanwhile, for a five-year-old upper medium diesel doing 30,000
miles over three years, with 9,000 business miles, the on-the-road
cost calculated by Fleet Audits amounts to 31p-33p per mile.
Fleet Audits said that it had passed on the results of its
research to the government. A spokesman said: “Our analyses, which
has been passed to HM Revenue & Customs, as they make their
Budget deliberations, is designed to project typical average
performance of ordinary cars from ordinary people, living in a
hugely variable market.”
Fleet Audits said that the more employees drive for business in
their own cars, the more the cost-per-mile falls, as costs such as
maintenance and VED are fixed. “It is only fuel that is truly
linear with increasing mileage,” Fleet Audits said.
Motor Finance Issue: 41 – March 08
Published for the web: March 6 08 18:6
Last Updated: March 13 08 12:36
