Despite widespread predictions that the controversial Approved Mileage Allowance Payment (AMAP) rates would be amended, the Government has left them unchanged.

AMAP rates are used to calculate the tax-free rate at which employees who use their own vehicles for business are reimbursed.

They have been fixed at 40p for the first 10,000 miles and 25p for every mile thereafter for the past six years.

Disquiet over the rates, especially from unions representing public sector employees, reached a climax late last year when the UK’s largest union – Unison – said it would consider strike action if the rates were not increased.

Ignoring this threat, and following almost 12 months of negotiations on how AMAPs should be amended, the Chancellor has decided to leave the rates unchanged.

However, Mr Darling has left some uncertainty about any future reforms after he said: “The Government will take decisions on whether to align the tax/National Insurance contribution treatment of AMAPs in light of the outcome of the HM Revenue & Customs’ consultation on collecting tax on benefits-in-kind and expense payments.”

A spokesman for HMRC added: “Budget 2008 said that tax-free mileage allowances (AMAP) rates and thresholds would be maintained at current levels.

"The Chancellor keeps all taxes and reliefs under review.”

Such comments have left many in the industry unsure about future plans for the rates.

“Although we are surprised that there has been no change to AMAP rates, we welcome that the Government’s review has now been concluded and can appreciate the challenges and complexities that were involved,” said Gary Killeen, commercial leader at GE Capital Solutions, Fleet Services.

“We would, however welcome a long-term statement.”

Others have interpreted the Chancellor’s statement as an attempt to reassure employees who have opted into employee car ownership schemes.

“Some were expecting a change in AMAP rates, but they have kept at the same level as before,” explained David Brennan, managing director of LeasePlan.

“This provides a level of confidence for drivers in employee car ownership schemes, who might have wondered if they were still going to be cost-effective.”

However, the underlying issue with AMAP rates remain – employees are increasingly complaining that they are out of pocket because of increases in fuel costs, which have not been counteracted with a rise of AMAP rates.

“Rising motoring costs had put the Government under pressure to increase the AMAPs paid to employees using their own cars to fulfil their job requirements,” said Nick Sutton, chairman of Provecta.

“Motoring organisations and trades unions had claimed that the two current thresholds failed to cover the cost of using all but the smallest engined vehicles on the road.”

On the other hand, some fleets and their suppliers have been expressing a concern that company cars were becoming less attractive.

Therefore they have been pressing for a reduction in the rates.

Such contradictory views left the Treasury with a tough decision, and it opted to do nothing – for now at least.

“This lack of a conclusive announcement could be linked to disquiet within the public sector for a hike in AMAP…The issue around AMAPs could therefore be becoming more politicised,” said Peter Tatlock, MD Masterlease.

“This does prolong the uncertainty for businesses reviewing their company car policies.”