Mileage Claims

p_chewy

Anyone know if there is a legal statemement on the rules for business mileage, relating the number of miles that should be claimed for in a business trip?

For instance if the mileage for a trip is 175 total and the normal journey to work (assuming you drove) is 25 miles, does that make the expenseable amount of business miles 150?

Seems so, but consider that living in south west London a trip to Hertfordshire would be around the M25 and not through London. If the company believes the mileage claim should be the distance between the normal office (cenrtral london so no one actually drives there) and Hertfordshire, which is correct. This equals 65 business miles opposed to 150.

Which is correct - the additional cost incurred to the employee for the business miles or the cost of the mileage from the normal place of business?

at 40p a mile - 65 miles is £26 which doesn't cover the true cost of the trip at all, whereas at 150 miles the expense claim is a whopping £60.

Quite a big difference.

dzug1

Normal office to business destination is a legitimate interpretation. It's what they require you to do. If you choose to do something different then that's your affair.

Your interpretation is just as legitimate - it's your company's choice.

mrkbrrws

The entire journey is business travel, see http://www.hmrc.gov.uk/manuals/eimanual/EIM32300.htm.

"However, you should not try to argue that a journey to or from a temporary workplace is substantially ordinary commuting where the extra distance involved is 10 miles or more each way"

So if you travelled 150 miles and your employer paid you £26 you have an allowable expense of £34 (£60 - £26).

p_chewy

Thanks for the replies - the HMRC explanation is precisely what I'd been looking for and will help considerably.

p_chewy

on reflection, what do you mean by allowable expense?

Andy_L

Allowable expense is one that can be paid without you having to pay income tax on it. eg your employer could pay the cost of you commuting to & from your normal place of work but as it isn't (generally) an allowable expense you would have to pay tax on it.

Bare in mind that your employer is not obliged to pay you an expense just because it is an "allowable expense". It's a matter of whether it's in your contract and/or if they can recruit & retain staff if they pay less.