Mileage rates. Where do they come from?
Rising fuel cost and static salaries are causing genuine hardship for motorists in general but particularly those that undertake mileage on behalf of their employer. HMRC guidelines in the form of the advisory fuel rates and AMAP’s are set but arguments continue as to whether or not they cover the actual cost incurred.
One area where this is less of a problem for driver is within local authorities who generally pay in excess of these HMRC set figures. Why in these austere times is it acceptable to pay more in the public sector than the private?
The Taxpayers Alliance published a report around business mileage reimbursement and is constantly lobbying government to bring the public sector in line with the private sector; it certainly would appear that they have a strong case.
Figures released under the freedom of information act show that in 2010/11 the average reimbursement rate in local authorities was 56.4p per mile, a staggering 11.4p per mile more than the HMRC AMAP rate of .45p or, if you prefer 25% more!
With the average authority paying back £1,012,216.54 for business mileage that “extra” 25% comes to a staggering £253,054 per authority or looked at as a whole it’s an eye watering £107,294,954.
Whilst this situation is clearly worrying for tax payers it is worth noting that these statistics are historical and that more recent figures may paint a different picture, closer scrutiny of council budgets and increased accountability may well have had a positive impact.
We look forward to the next freedom of information request regarding council mileage rates, better still how about one for the whole of the public sector