Mileage allowance - is it worth it?

karenf_2 · 4 February 2008 at 1:59PM

Hi
Hoping for advice please.
I work on a countrywide basis and am home based. I travel all over the country with my work and there is a head office in the capital city that I only have to visit on a 'need to' basis.
I have just been told that the policy on using my own car for business use is: 40p a mile up to 85 miles.
anything over 85 miles is £24 payment with 12p per mile. This means that I lose out on my mileage payments and am being 'encouraged' to use a hire care or public transport for my journeys. Public transport is not a viable option due to the rural nature of where I travel to. I don't have off street parking so a hire car having to be parked will be a huge inconvenience and I also believe it will be the more expensive option. I regularly travel on journeys of 50 to 60 miles each way and will have to be having a hire car for meetings of half a day, therefore the company incurring a full day carhire charge.

Any comments will be welcome.

jimbo_the_jetset · 4 February 2008 at 3:27PM

I'd question that per mile rate for your car, see HMRC website here:

http://www.hmrc.gov.uk/rates/travel.htm

It's 40p up to 10,000 miles per year, then 25p after that. Says nothing about a per day rate.

dzug · 4 February 2008 at 3:38PM

jimbo_the_jetset wrote: »

I'd question that per mile rate for your car, see HMRC website here:

http://www.hmrc.gov.uk/rates/travel.htm

It's 40p up to 10,000 miles per year, then 25p after that. Says nothing about a per day rate.

That's the MAXIMUM your company can pay you without having to charge you income tax on it. Doesn't mean they HAVE to pay it - if they can get away with it they can pay nothing at all.

You can however claim the difference between what you get and that 40p as a tax allowance.

If your company has made that policy decision, and won't listen to exceptions, then go for the hire car option. They clearly don't care that it will cost more (they have probably reckoned that you will use your own car for convenience despite the lower rate). And (particularly in rural areas) taxis are public transport......

jimbo_the_jetset · 4 February 2008 at 4:42PM

dzug wrote: »

That's the MAXIMUM your company can pay you without having to charge you income tax on it. Doesn't mean they HAVE to pay it - if they can get away with it they can pay nothing at all.

You can however claim the difference between what you get and that 40p as a tax allowance

Sorry, realised that after a bit more HMRC reading

Conor_3 · 4 February 2008 at 6:40PM

Just to add, unless you've altered your insurance to include business use then whilst you're using your car on company business, you're uninsured.

Hintza · 4 February 2008 at 7:23PM

Assuming 30mpg then it is costing you about 15p per mile just for petrol alone (40mpg = 11.5p per mile).

I think you need a serious chat with your employer. Or just go with the hire car option as has been advised.

One point, is there an error in your figures you say its 40p for 85 miles = £24 then 12p a mile. Should that be £34 (0.4 x 85 = £34).

Iamthesmartestmanalive · 4 February 2008 at 7:36PM

My work recently revised their policy

Their figures were similar

Any journey over 100 miles a day is a hire car only as its cheaper

It may not seem it to you but your company will not be deliberatly choosing a more expensive option

You mention about parking, do you actually need to pay to park at your home?

Unless this is the case then I dont think you will win

The company would probably have a policy for appeal on the grounds of extreme hardship but I doubt you would win on that

Mileage allowance - is it worth it?

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