Employee milage reimbursement

donteatthat

Hi,

If an employee occasionally needs to attend a course we reimburse them any rail fares etc they incur + payment for travelling time.

If they use their car, what is a reasonable amount to give them for mileage allowance, and what are the tax implications to us / them? I know some of them also do a self assessment for things like laundry, subscriptions etc - can they claim back mileage here also like self-employed people do?

Thanks for any advice.

det

CLAPTON

the HMRC allow mileage allowances of 40p per mile for the first 10,000 miles and then 25p for the rest... that is they consider this a fair reflection on the costs..
If you pay them more than this the HMRC will consider it a tax benefit and if you pay them less they can get tax relief on the difference.

WageSlave_3

Clapton's got the figures right. I'm guessing the OP is talking more from the perspective of an employer / boss? If so, my company only directly re-imburses 13p a mile for the car I use (less for smaller engines and different amounts for petrol cars). I then have to reclaim the difference up to 40p per mile on the first 10k from my tax return. They issue me with a form which confirms all the figures and I enter these in the appropriate part of the return. I believe this is now quite common for large organisations.

Bit of a pain for the employee, but I can see why companies do this to protect their cashflow / reserves. I've looked on it as being a nice cheque one a year once my return is filed, though! Silver linings and all that!

CLAPTON

WageSlave wrote: »

Clapton's got the figures right. I'm guessing the OP is talking more from the perspective of an employer / boss? If so, my company only directly re-imburses 13p a mile for the car I use (less for smaller engines and different amounts for petrol cars). I then have to reclaim the difference up to 40p per mile on the first 10k from my tax return. They issue me with a form which confirms all the figures and I enter these in the appropriate part of the return. I believe this is now quite common for large organisations.

Bit of a pain for the employee, but I can see why companies do this to protect their cashflow / reserves. I've looked on it as being a nice cheque one a year once my return is filed, though! Silver linings and all that!

maybe but there is no way that 13p per mile covers the cost of a car.. in fact it won't cover the cost of petrol let alone cover any wear and tear

and of course the HMRC doesn't make up the difference, they simply allow you the tax allowance on the difference (a very different thing) .. helps a little but you still wont break even at today petrol prices

donteatthat

Thanks guys thats helpful.
Ours currently get 30p a mile, one of them has suggested it should be raised. As I suspected there is more to it than just us agreeing and paying them more without looking a bit closer at it.

Barneysmom

Yes, a friend of mine ended up subsidising his company by £70 a month. In the end he wrote to them and said he wasn't prepared to pay for fuel out of his wages any more. So they had to reimburse him and make alternative arrangements.

SwitchyChick

donteatthat wrote: »

Ours currently get 30p a mile, one of them has suggested it should be raised.

The co I work for has just raised mileage allowance from 30p to 35p.

frugallass

and you can claim extra for any passengers too.....5p per passenger per business mile

Gers

frugallass wrote: »

and you can claim extra for any passengers too.....5p per passenger per business mile

That gave me a 'wow' moment - could you clarify this please? I have just submitted .. well not quite 'just' but about a month ago, the P87 for tax relief but had no idea about this one.

How do we provide proof of these passengers???

Fair took my breathe away...

surreysaver

Gers wrote: »

That gave me a 'wow' moment - could you clarify this please?

http://www.hmrc.gov.uk/paye/stepbystep-mileage.htm

down the bottom of the page

BoGoF

frugallass wrote: »

and you can claim extra for any passengers too.....5p per passenger per business mile

I wouldn't get too excited over that - you cannot claim the 5p per mile passanger allowance from HMRC as an expense. Your employer can however, at their discretion, pay you 5p per mile per passanger without you paying tax/NIC on it - a very big difference to what was inferred.