mileage allowance

ab7167

Can an employer decided with no notice to change the mileage allowance? At the moment we get 40p per mile up to 5,000 miles per year and 22p per mile after that. They want to change it to 12p per mile flat rate. They seem to think we can claim the difference back from HMRC? I thought you could only claim the tax back on the difference which not the same at all!

We are all designated "occasional" car users, but I couldn't do my job without my car. I'm actually due for Mat Leave again soon, so won't affect me too much in the short term, as I am on restricted travel due to health problems, but some of my colleague stand to lose £1500 per year because of this.

They say it is to promote sustainable travel - OK, I can understand this, but then they don't accept that it takes longer and costs more to get to places by public transport. And some of the places I visit have 2 buses a week, if that!

My contract only says I have to have a clean, full driving licence, would I be within my rights to say "OK, if you are only going to pay me 12p per mile, my car is no longer available for company use" and they would either have to sort pool cars or some other method for me to do my job?

I really don't want to rock the boat too much, but this has come as the final straw on top of compulsory redundancies that mean we now have ridiculous workloads, staf leaving and not being replaces resulting in even more work for those left, no pay rises this year - there was utter outrage and fury in the office, but they are standing firm - saying we will not be out of pocket because of claiming back from HMRC

Who is correct - should I keep my head down and accept the finacial loss?

Zazen999

You will be out of pocket as you do only claim back the tax.

Would it be financially viable to even have a car with this amount [plus the tax back]?

I'd do a summary of the difference in last year's mileage and the same at this rate; and see the difference. This needs to come from ALL the people affected - so that you can show the company that it might indeed be better to run a couple of pool cars. Don't forget to cost in the additional wear and tear and insurance costs.

juliescot

I was talking to a friend who decided he no longer wanted to use his own car for work.

If he has to travel now he is given either a hire car or pool car or the time to get there by public transport.

Personally this is the route I would go down.

DVardysShadow

ab7167 wrote: »

Can an employer decided with no notice to change the mileage allowance? At the moment we get 40p per mile up to 5,000 miles per year and 22p per mile after that. They want to change it to 12p per mile flat rate. They seem to think we can claim the difference back from HMRC? I thought you could only claim the tax back on the difference which not the same at all!

Cheeky blighters. The fact of the matter is that [if you keep records], you can claim back tax on the difference between what it actually costs you and the amount they reimburse you. Keep that fact in mind for when you argue against this, because it is actually an admission that some money must come out of your pocket.

We are all designated "occasional" car users, but I couldn't do my job without my car. I'm actually due for Mat Leave again soon, so won't affect me too much in the short term, as I am on restricted travel due to health problems, but some of my colleague stand to lose £1500 per year because of this.

If the £1500 is a reduction of overpayment, it is still wrong to shift the goal posts. But if travel is now subsidised by the employee, it is wrong

They say it is to promote sustainable travel - OK, I can understand this, but then they don't accept that it takes longer and costs more to get to places by public transport. And some of the places I visit have 2 buses a week, if that!

Then use sustainable travel only. Seriously. And if the sustainable travel is not going to work out, then tell them that you want the unsustainable travel rate if that is the transport you have to use.

My contract only says I have to have a clean, full driving licence, would I be within my rights to say "OK, if you are only going to pay me 12p per mile, my car is no longer available for company use" and they would either have to sort pool cars or some other method for me to do my job?

This is effectively what you have to do. But turn it around. They are going beyond their rights if they expect you to use your car at your expense.

I really don't want to rock the boat too much, but this has come as the final straw on top of compulsory redundancies that mean we now have ridiculous workloads, staf leaving and not being replaces resulting in even more work for those left, no pay rises this year - there was utter outrage and fury in the office,

You have to rock the boat here. Others will hopefully provide good tips on how to approach this, but effectively the employer is the one rocking the boat. Hopefully, everyone remains outraged - you need to stick together. Would your partner allow his name to be used here? Could you say that the car is not just provided by you, it is provided by the household, and your partner is not in agreement?

but they are standing firm - saying we will not be out of pocket because of claiming back from HMRC

That is rubbish. Utter bilge. Now make sure you understand my explanation under the first point about what you get back from HMRC. Make sure you really understand it and tell these people that if there is one thing which really gets up your nose, it is being fed lies and being treated like a fool.

Who is correct - should I keep my head down and accept the finacial loss?

It is your choice. Personally, I would put them on notice that the car is not available on their terms and that I fully endorsed their support for sustainable transport, which I would use from now on.

Anihilator

Lets be honest now the 40p per mile is a very high rate and very few actually incur 40p a mile travelling.

Public transport and hire cars are normally always cheaper unless its a journey under 100 miles also.

Tbh I think your employers have cottoned onto the fact you and your colleagues are subsidising your earnings with the travel expenses! they key word being expenses.

DVardysShadow

Anihilator wrote: »

Lets be honest now the 40p per mile is a very high rate and very few actually incur 40p a mile travelling.

Public transport and hire cars are normally always cheaper unless its a journey under 100 miles also.

Tbh I think your employers have cottoned onto the fact you and your colleagues are subsidising your earnings with the travel expenses! they key word being expenses.

But 12p/mile does not even cover fuel - what about wear and tear, insurance, road tax? The employer may have cottoned on to employees gaining from the arrangement, but they are now expecting the employees to pay from their own pockets. Plus of course the bit about the refund from HMRC is downright deceitful.

Anihilator

The employees would be insuring their cars and having wear and tear anyway.

I don't actually think for occasional use 12p is that unfair and it will cover fuel in most cars.

Oldernotwiser

Anihilator wrote: »

The employees would be insuring their cars and having wear and tear anyway.

I don't actually think for occasional use 12p is that unfair and it will cover fuel in most cars.

Employees are likely to be paying higher premiums if using their cars on business and if some people have been getting £1500 per year that will equate to nearly 4,000 miles, adding quite a lot of wear and tear to their vehicles.

fengirl_2

40p pm is the HMRC agreed rate which means that someone [official] has worked out that if you are paid 40p pm to run your car, you are not making a profit. You need to take into account not only fuel, but tax, insurance, repairs, MOT, cleaning and depreciation on capital as well as loan interest if applicable. I would doubt you could fund all that on 12p pm. As others have said, tax releif is just that - relief from tax and not a refund from the government to subsidise your employer's costs. Contracts can only be changed by agreement and your employer should be negotiating this with you, not imposing the change.

Andy_L

According to the AA 12p won't cover the running costs (ie only petrol & servicing)

http://www.theaa.com/allaboutcars/advice/advice_rcosts_petrol_table.jsp

DVardysShadow

Anihilator wrote: »

The employees would be insuring their cars and having wear and tear anyway.

I don't actually think for occasional use 12p is that unfair and it will cover fuel in most cars.

What Oldernotwiser says
What fengirl says

There is more to it than fuel, and it is not occasional use, it is casual use, which can involve regular journeys. Employer should be paying a fair contribution to the running costs of the car. 12p [fuel only] is unfair.