Fleet News

Grey fleet miles tumble as costs rise

Grey fleet drivers – those who use their own vehicles for business – are travelling fewer miles.

Rising fuel prices and the failure of the government to increase the Approved Mileage Allowance Payments (AMAP) rates to reflect this have been cited as the main factors behind the decrease in grey fleet business miles.

According to analysis of data from The Miles Consultancy’s online tracking of drivers’ mileage, there has been a 12.2% reduction in mileage over the past six months.

“Rising fuel prices have underlined the fact that HM Revenue and Customs’ (HMRC) AMAP rates – the cash allowances employers pay to their staff for using their own cars for work – are failing to keep pace with drivers’ costs,” said Paul Jackson, managing director of The Miles Consultancy.

AMAP rates, which are tax and national insurance free, arer set at 40p for the first 10,000 miles travelled and 25p thereafter.

They have not increased in the last six years, despite an exhaustive review carried out by HMRC last year.

Anecdotal evidence suggests that employees are becoming increasingly resistant to using their own vehicles, as many feel they are not being fairly compensated for doing so.

“One utility company is getting 30 drivers complain ever day,” said Mr Jackson.

Two months ago the Royal College of Nursing called on the chancellor to increase AMAP rates.

However, the chancellor cannot increase rates until the next budget, although there are expectations that he will make an announcement in the pre-Budget report in October relating to AMAP rates.

Such is the disquiet among grey fleet drivers that NHS Employers, which represents the country’s health services employers, is expected to announce shortly that it will increase its in-house mileage payments to help compensate for the increased costs facing drivers.

According to estimates, the actual cost of running a car that covers 10,000 miles is £6,300 compared with the £4,000 a driver would receive under AMAP rates.

“It’s hardly surprising that drivers are scared to clock up the business miles they may have been doing in the past, because they are finding themselves subsidising the cost of business travel out of their own pockets,” said Mr Jackson.

“AMAP rates need to recognise the real cost to drivers.”

 

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