Lucille Thirlby 0207 551 1315
To: Secretaries of Local Government Branches in England,
Wales and Northern Ireland
(Scotland – for information only)
Regional Heads of Local Government
Registered Sectional/Professional Bodies – for information
5 April 2011
This circular advises branches on the Employers’ position relating
to annual increase of mileage rates and the revised HMRC rate.
HMRC has revised its AMAP mileage rates from 6/4/11(the new tax year).
These are detailed below. We know from our recent survey of branches that
25% of employers are seeking to reduce car allowances and that already a
number of authorities have moved away from the NJC car allowance rate and
apply the HMRC rate. Although this is a small increase in the HMRC rate and
still does not reflect the real cost of providing a car for work, branches must
ensure employers are aware and implement this increase.
For years from 2011-12
Tax - Rates per business mile
Type of vehicle First 10,000 miles Above 10,000
Cars and vans 45p 25p
Motorcycles 24p 24p
Cycles 20p 20p
NJC Car Allowances
Branches will be aware that the NJC car allowances are normally up-rated in
April each year using a formula, which is compiled by technical advisers. This
reviews the allowances which cover standing charges (depreciation, tax and
insurance) and running expenses (petrol, tyres and servicing/repairs). The
technical advisers’ report does reflect what has happened over the last year in
relation to all these elements.
The petrol element of the allowances are based on a price of per litre for
unleaded petrol (based on actual pump prices in the first two weeks of January
[as surveyed by the Automobile Association on behalf of the Society of Motor
Manufacturers and Traders] in accordance with the jointly agreed formula for
calculating the allowances each year.
As previously reported, in October 2010, the LGE wrote to the NJC Joint
Secretaries regarding the commissioning of the technical advisers’ car allowance
rate report for 2011/12.
The letter stated that previous advisers’ reports had recommended that the
formula needed development and additionally stated the NJC employers’ desire
to begin discussions with the trade unions on Green Book terms and conditions.
In conclusion, they stated that their view was ‘that the 2011 report should not be
commissioned at this stage and that the 2010 mileage rates should continue to
apply (if necessary beyond 1 April 2011) until such time as the NJC agrees an
alternative method of recompense.’
The Joint Secretaries responded to the letter and in summary stated that the
NJC trade unions did not agree with the Employers’ view and requested the
Employers to commission the technical advisers report.
At the NJC Executive on 10 December, the issue of car allowances was
debated. However, the Employers’ position remained that they are not prepared
to commission the technical advisers’ report at this stage.
A further letter was received from the employers on 16 March confirming their
position. This matter was further discussed at the recent Joint NJC Executive
(21 March) and the trade unions informed the employers side that we will be
registering a dispute on this matter. In the meantime, the 2010 car allowance
rates will continue to apply.
We will keep you updated on progress of the dispute
Local Government Service Group