The UK Government is reviewing the Approved Mileage Allowance Payment (AMAP) rates for employees who use their own vehicles for work – a move that could affect millions of grey fleet drivers.
Speaking in the House of Commons, Chancellor Rachel Reeves confirmed the Treasury is considering whether the long-standing rates still reflect real-world motoring costs.
Currently, employees can receive 45p per mile for the first 10,000 miles and 25p thereafter without incurring tax. The rates are intended to cover fuel, insurance, servicing and maintenance. However, they have remained unchanged since 2011, despite significant increases in vehicle running costs.
Reeves told MPs that motoring expenses have “evolved significantly” and said the issue would be examined ahead of a future fiscal event.
Trade union Unison has long argued that the allowance is outdated. Analysis using its data by the RAC Foundation suggested the real cost of using a private vehicle for work could be around 63.4p per mile. The gap has been estimated to cost some public sector workers up to £6,000 per year.
For fleet operators, the debate highlights the wider operational and compliance challenges around grey fleet use.
Fleet managers looking to reduce risk and improve oversight can explore practical guidance in FleetWise’s grey fleet compliance playbook.