Company Car Business Mileage Rates

louise3965

Hi, first time on this board so be kind to me

I have a skoda fabia estate diesel 1.9 company car which does about 60 mpg. My work pay me 10p per mile for all the business mileage I do. Short journeys that doesnt cover it but long journeys it just about does but I am worried when the extra 3p goes on fuel it will mean I am out of pocket.

Are there any rules on this, or where do they get the figure of 10p per mile from?

neilmcl

Your company are free to pay you whatever they see fit for business mileage.

The only rules are with regards to what you can claim against tax and VAT rates from the HMRC. The current mileage allowance rates from the HMRC are 40p for the 1st 10,000 miles, and 25p thereafter within the tax year.

alleycat`

The prices are set (usually) in line with recommendations from HMRC.


http://www.hmrc.gov.uk/fuel_company_cars/htm

If your company are not following these values they usually have to explain to HMRC why not (i think).

The 40p rate is if you use your own vehicle and claim the money back for business related fuel usage.

Nelmer

http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm
these are the current rates set by HMRC. If you are being paid less you can claim the difference back from the revenue on your annual tax return. If you are paid more then it is a taxable benefit that should be stated on your year end P11d. Your company should lay out what they will pay you before they give you the car, however a lot of companies pay what they deem fit as you are having the car taxed, serviced, insured etc by them (the company I work for being one of the stingest I have ever come across!!!).

The rates are changed by the HMRC twice a year 1 Dec and 1 Jul.

AdrianHi

The maximum allowance HMRC will allow as an expense (i.e. no tax or NI to pay) for fuel for company car users is here:
http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm
so 11p per mile for your car.
You can claim tax relief on the 1p per mile difference (is it worth it?), you need form P87 for this.
HMRC rates are reviewed twice a year, 1 June and 1 December and if there is a 5% shift in fuel prices since the previous rate was published they will change the limits up or down accordingly.

louise3965

Thanks, thats really helpful i didnt know there was a sort of benchmark. Cheers