Fleet News

Fleets ignored in Pre-Budget Report but debate goes on

FLEETS were ignored in the Pre-Budget Report this week, with an announcement on the changes to the Approved Mileage Allowance Payments (AMAPs) held over for a later date.

However, debate on the subject continues, with fleet consultant Stewart Whyte accusing advocates of higher reimbursement rates (Fleet NewsNet, December 1) of not understanding the founding principles of the system.

Whyte said: ‘Those who have criticised the ACFO call for a serious review of the AMAP situation have missed the point. The first mistake they made is to see AMAPs only in terms of a substitute for a ‘conventional’ company car. By contrast, the majority of employer/employee situations using AMAPs are people who have never had a company car.

‘Within this population – about three million of the four million AMAP users – the average age of cars used is over five years, the average odometer reading in excess of 60,000 miles, with an average engine size around 1.6 litres. The current AMAP payments permit a tax-free reimbursement far in excess of the likely costs incurred by people running vehicles at this level.’

Whyte claimed that many mistakenly saw the AMAP rates as a right for the employee.

He added: ‘It needs to be fair to employees and on employers, but principally it needs to be fair on the taxpayer. These are tax cut-offs, not actual payments.

‘It is for at least these reasons that I have called for a serious review of the whole situation.

‘My ACFO colleagues supported the draft paper, while recognising that the current scheme does suit some members.

‘But the single-tier scheme introduced in 2001/2 simply fails the fairness tests at nearly every count: the only redeeming feature is its simplicity.’

ACFO called for the rates to be lowered from 40p per mile for the first 10,000 miles to a lower figure more like the 4,000 miles previously used until 2002, but added that the system may have to have increased initial rates at low mileage levels, to ensure fair treatment for those who have to increase their insurance costs for business mileage.

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