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PBR LATEST: Chancellor holds off on AMAP review, again

Date: 09 October 2007   |   Author: Tristan Young

Alistair Darling

For the second budget statement in a row the Chancellor has failed to reveal how he plans to bring AMAP rates (tax-free mileage allowances) into line with other green-promoting car taxes.

The Government also revealed it would wait until the 2008 Budget before revealing any policy changes on capital allowances on business cars.

Signalling the further delays, the PBR statement said: "Budget 2007 also announced that HMRC would undertake discussions with business to review AMAPs. In advance of the Budget, the Government will continue to consider the representations received from industry."

Tax advisor Alastair Kendrick said this delay was due to the complex nature of AMAP rates and the lack of any firm information on how many people use AMAPs and what sorts of cars they drive.

"The real issue is that they need to do an impact assessment of any changes first but there's no data to do this," said Kendrick.

However, employee car ownership schemes which, in part use AMAP rates, appear to have been given the all-clear by the PBR.

"The Government recognises there are interactions between rates of company car tax, employee car ownership schemes, tax-free mileage allowances (AMAPs), and tax relief on business cars, that work together to determine car purchase and usage choices.

"Following HM Revenue and Customs' review of the taxation of ECOS, the Government has decided not to impose a benefit-in-kind charge."