Chancellor increases AMAP rate for grey fleet drivers
The Chancellor has increased mileage rates by 10 pence per mile (ppm) for people who drive their own vehicle for work, so-called grey fleet drivers. In a speech in the House of Commons yesterday (Thursday, May 21), Rachel Reeves told MPs she was increasing the approved mileage allowance payment (AMAP) rate[1] by 10ppm for the first 10,000 miles in a tax year, with each business mile thereafter paid at 25ppm. This, she added, would be "backdated to April 2026, benefiting those who need to drive for work, from care workers to plumbers".
Ensure you always get Fleet News insight. Make us your preferred source on Google[2] The allowances are designed to include fuel, insurance, servicing and maintenance. However, the rates had remained unchanged since 2011, when the rate for the first 10,000 miles was last increased from 40p to 45p[3].
The previous uplift in rates had been nine years earlier in 2002. Government announces increase in fuel rates for company car drivers,
Unison general secretary Andrea Egan said: "This simple measure will provide immediate help for countless frontline workers in public services. Particularly at a time when living costs are going through the roof once again.
"People who need their own cars for work have been left thousands of pounds out of pocket for far too many years. "Unison has campaigned hard for this long overdue change. It's good to know the chancellor has listened to the concerns of staff penalised by frozen rates.
"There's still more to do to ensure no one is losing out and the union will continue to campaign for more over the coming months." David Bushnell, director of consultancy and strategy at Fleet Operations, also welcomed the increase. "Any move to ease cost pressures for drivers is welcome, and this 10p increase in tax-free mileage rates will certainly be helpful for employees who use their own cars for business mileage and rely on AMAP payments," he said. "Mileage rates have felt increasingly out of step with the real cost of running a vehicle, so this is a positive step for grey fleet drivers and the employers that rely on them."
However, Bushnell says it can only be viewed as a "partial measure". He explained: "It supports employees doing business mileage in their own vehicles, but it does little for fleets, company car drivers, commuters or businesses managing wider transport costs. "For many motorists and businesses, the bigger issue remains the day-to-day cost of mobility.
Fuel prices, charging costs and the uneven tax treatment of public EV charging continue to put pressure on both drivers and employers. "If the Government wants to deliver meaningful support for motorists and accelerate the transition to electric vehicles, it needs to go further." He believes that "meaningful action" on fuel costs, alongside a reduction in VAT on public charging, would do more to ease the financial burden on drivers, particularly those who cannot charge at home and who are currently paying significantly more to run an EV.
"Even more so for companies that have introduced eLCVs, where drivers are often more reliant on the public network," he added. "The current VAT disparity between home and public charging remains a real fairness issue. Drivers should not face higher costs simply because they rely on the public network.
"It also makes fleet electrification more complicated for employers whose drivers do not have access to off-street parking.
"The AMAP increase is a positive step, but it should not be mistaken for a panacea to the rising cost of business and personal mobility."
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