He said: 'It is a very complex calculation and fleets cannot hope to get it right for everybody — unless drivers are paid different amounts. Do not assume the same calculations work for everyone.' If drivers are to have access to the same cars they must receive the same cash allowance, but many firms use Inland Revenue Authorised Mileage Rates to fund part of the allowance.
IRAMR are a tax-efficient way of reimbursing drivers but too great a reliance on the rates to fund a cash allowance means drivers who clock up higher business miles will receive more money, and therefore have access to more expensive cars. Employers must also be flexible in case employee business miles increase or decrease substantially through changing work patterns.