New job but fuel/mileage reimburse concern

risingdamp_2

Hi

I have a new job to start soon which will see me travelling 50 miles back and forward to work every day to by car. I'll have a 5.5k p/a car allowance and in my contract it says...'the employee wil be reimbursed all travelling and other expenses incurred in the discharge of duties'

I'd like to lease a car and I understand and appreciate that the allowance should cover monthly costs, insurance, servicing etc., but if I'm forking out for fuel too (3.5-4k p/a by my reckoning) then I'll probably end up with a Trabant. The job itself is good package-wise, which is why I'm prepared to do so many miles to and from (I couldn't find anything as competitive closer to where I live), but I'm wondering is there a fixed and fast rule or a more discretionary one as far as employer is concerned re fuel costs? That being so does the above sentence cover it or is is too generic and vague? I have asked the co, but HR does not return till Tuesday next week and I'd like to be forewarned as to what to expect and what kind of options I have. I also don't see any reference to business mileage allowance, either, in the contract.

Apologies if this sounds all a touch naive and ignorant, but this is the first car allowance I've had in the UK for a company I've never worked for before. I used to work in Germany and it was a far simpler and more beneficial set-up (i.e all private and business fuel reimbursed in full, which included to and from work:T )

Many thanks in advance for any advice.

risingdamp.

jobbingmusician

As I understand it, the Inland Revenue rules prohibit the employer from contributing to the employee's costs of getting from home to the place of work. That means that if your place of work is 50 miles away, the employer will not contribute to your petrol to get there.

However, if the contract says 'the employee wil be reimbursed all travelling and other expenses incurred in the discharge of duties', it implies that you are expected to do quite a lot of travelling. It might be possible to get the employer to agree that your place of work is actually home, so that mileage is payable from there (within the limit of the £5.5k of course).

Hope this helps - if it sounds a little vague, my more concrete advice is to look around the Inland Revenue site, or ring your local office, for clarification of the first point I have made.

Hagar_uk

risingdamp wrote: »

Hi

I have a new job to start soon which will see me travelling 50 miles back and forward to work every day to by car. I'll have a 5.5k p/a car allowance and in my contract it says...'the employee wil be reimbursed all travelling and other expenses incurred in the discharge of duties'

I'd like to lease a car and I understand and appreciate that the allowance should cover monthly costs, insurance, servicing etc., but if I'm forking out for fuel too (3.5-4k p/a by my reckoning) then I'll probably end up with a Trabant. The job itself is good package-wise, which is why I'm prepared to do so many miles to and from (I couldn't find anything as competitive closer to where I live), but I'm wondering is there a fixed and fast rule or a more discretionary one as far as employer is concerned re fuel costs? That being so does the above sentence cover it or is is too generic and vague? I have asked the co, but HR does not return till Tuesday next week and I'd like to be forewarned as to what to expect and what kind of options I have. I also don't see any reference to business mileage allowance, either, in the contract.

Apologies if this sounds all a touch naive and ignorant, but this is the first car allowance I've had in the UK for a company I've never worked for before. I used to work in Germany and it was a far simpler and more beneficial set-up (i.e all private and business fuel reimbursed in full, which included to and from work:T )

Many thanks in advance for any advice.

risingdamp.

The system you mention you had in Germany , does happen here as well, for those lucky enough to get it.But is usually described as a fully expensed company car. However we still get taxed on it . However you mention expenses for discharge of duties. So sounds like you will just get expenses for actual work travel (to customer sites from home, or from your offices). This will exclude travelling to your standard workplace. IMHO you will look a bit daft even asking such a question from HR.

withabix

I get £5500 per year car allowance and a fuel card for all of my fuel. Win-Win

Due to the nature of my job in the industry I work in, all of my work mileage receives tax relief as well . The tax man pays me back around £2000 per year.

Jobbingmusician's post is incorrect by the way. Any employer can (and many do) pay you your fuel costs for travelling to work, however if it is a fixed place of work (ie your normal location), then there is no tax relief available for that mileage.

rising-damp - don't forget that you will pay tax and national insurance contributions on that car allowance figure. Also, with regard to leasing a car, you appear to be doing 26000 miles per year just driving to and from work. Add another 10,000 miles for private use and that will result in a VERY high leasing rate. Those headline lease figures you see in adverts are always based on 10,000 miles per year.

risingdamp_2

Thanks for your responses.

Hagar_UK: Yep, there is an element of 'how daft am I going to look?' by way of clarification as to what they'll stump up for exactly, but I don't mind looking a fool - it wouldn't be the first time.

withabix: thanks for the sober reminder as to the real costs in leasing, given the miles I'll clock up. As you say, some cos pay the fuel, some don't, so I'll find out tomorrow one way or t'other. I spoke to a couple of friends over the w/e who stated that their own respective cos pay for fuel costs to work. In one case, completely, in the other it's a 50/50 deal. Better than nowt.

withabix

We run two cars on car allowance schemes from our employers:

1 X-Trail bought new from car supermarket at large discount on best UK dealer price. Imported from Eire but no warranty issues.

1 ex-hire 2.2 Vectra SRi estate: £10k at 6 months old with 10,000 miles on clock.

Both cars bought on cheap non-dealer finance - the X-Trail on a 4 year extra loan at my fixed mortgage rate (1 year at 1.99% then 3 years at 5.99%) and the Vectra on a 6.9% APR personal loan.

This is an alternative route to leasing - we've done this with four cars to date and overall with servicing, maintenance and tax etc, they've cost us nothing over and above our car allowance, when tax rebate is taken into account.

We aim to get rid of them after just over 3 years - value left in the car pays off the remainder of the finance and leaves a few thousand pounds deposit towards the next one.

Only problem with this financing route is that loans are probably a little expensive right now...