NHS mileage allowances
From July 2013 there will be a new system in place for the reimbursement of costs incurred in using your own vehicle for your employer business (AFC Section 17 and Annex L). All vehicles will be reimbursed in the same way. A single rate of reimbursement will be set on 1 July. If costs remain as they are then that rate will be 68p for the first 3,500 miles and 23p a mile thereafter. The new arrangement will have an in-built assessment of motoring costs that will be reviewed twice a year. Increases in the cost of motoring will be reflected in a new rate. Where the cost of motoring decreases the reimbursement rate will decrease as well. Where the change is below plus of minus 5% the rate will remain the same.
HMRC Approved Mileage Allowance Payment system (AMAP)
Where a driver uses their car for their employers business they can receive tax relief on the cost to them. The Approved Mileage Allowance Payment system (AMAP) allows individuals to receive reimbursement of 45p a mile (for the first ten thousand miles and 25p thereafter) tax free. Reimbursement above 45p is taxed on the excess and reimbursement below 45p is available for tax relief.
Lease cars
If you use a lease car for work it is likely that you will only be reimbursed for the cost of fuel. HMRC publish advisory rates for fuel reimbursement on a quarterly basis. The latest figures are available on the HMRC website. Employers are not obliged to reimburse at these rates. Reimbursement above the rate will be subject to tax and below tax relief may be applied for. Fuel reimbursement for lease cars is not negotiated nationally. Local staff sides should consider the advisory rates set by the HMRC and ask employers what steps they are taking to ensure that lease car rates are appropriate.