Company Car Petrol Allowance

cupraturbo

I have a company car which i claim back business mileage, this rate has been at 16p per mile for the last 3 years regardless of car type/ engine size, yesterday i recieved an email from HR to state that this was being reduced as follows

Engine Size....................Petrol.............Diesel................LPG
1400cc or less.................11p................10p...................7p
1401cc to 2000cc............13p................10p...................8p
Over 2000cc...................18p................14p..................11p

I have a 1.9tdi Seat that averages 40MPG (official figures) with petrol at 98.6p where i live i would need to average over 50MPG to cost me 10p per mile which is near impossible, this now means that business miles now cost me!

Are they allowed to do this?

Any help/advise would be great.

Thanks

MickKnipfler

Isn't there an option to take the cash?

cupraturbo

No, i have asked but becuase of my high mileage they dont wanna pay me 40p per mile to use my own car!

MickKnipfler

That's a bummer. There must be some protection, otherwise, what's to stop them paying you 1p or even nothing??

lisyloo

I realise you want to know your rights, but have you asked your employer how they can justify paying you less than the cost of the petrol?

cupraturbo

This is a company wide change that takes affect as of today. I wanted to find out if their are any laws or regulations that i can use to back up my argument before taking it to the Boss!

bigbill

The inland revenue accept 42p per mile as reasonable.

You can claim the difference from your Tax Code by contacting the inland revenue.

MickKnipfler

bigbill wrote:

The inland revenue accept 42p per mile as reasonable.

You can claim the difference from your Tax Code by contacting the inland revenue.

Are you sure that applies for a company car?

lisyloo

The inland revenue accept 42p per mile as reasonable.

I think we are talking about 2 seperate things here.
When companies compensate you for using your PRIVATE car then they pay rates of around 40p. This is because they are not only paying your petrol but also compensating you for extra depreciation, repairs and insurance (as you need to increase your social, domestic and pleasure cover to business use).

For a COMPANY car it's different as many of the costs mentioned above are already paid for by the company so the payments made are a lot lower (basically just petrol).

The problem here is that the company are not even covering the cost of the petrol/diesel.

MickKnipfler

lisyloo wrote:

I think we are talking about 2 seperate things here.
When companies compensate you for using your PRIVATE car then they pay rates of around 40p. This is because they are not only paying your petrol but also compensating you for extra depreciation, repairs and insurance (as you need to increase your social, domestic and pleasure cover to business use).

For a COMPANY car it's different as many of the costs mentioned above are already paid for by the company so the payments made are a lot lower (basically just petrol).

The problem here is that the company are not even covering the cost of the petrol/diesel.

Exactly....the IR rates are (I believe) 40p for the first 10k miles and 25p thereafter. The difference is claimable against tax.

For a company car though, what is the mileage rate doesn't cover the cost? Can't you refuse to use the car and go by public transport?

lisyloo

I don't know what your legal rights are but in all these situations you have to consider your relatioship with your employer.
If you are the sort of person who "refuses" to do things and threatens solicitors at the drop of the hat then you might not be seen as a "team player" and be top of the list for the next redundancy round.

On the other hand your employer is being unreasonable in expecting you to subsidise the costs of petrol.
The best way to deal with this initially is usually to have a civil and sensible discussion with your employer.
You may find that your immediate boss totally agrees with you and this is a silly decision by the bean counters.

The best approach is usually to ask for some clarification and have a civil discussion rather than trying to enforce your rights.

If they have provided you with a car for business then clearly they have done so for a reason (usually because it's more convenient than public transport) so I would have thought that they wouldn't want to provide a company car AND pay for public transport.
On the other hand I agree with you that their stance is unreasonable.

Do you have a free legal helpline available on your home insurance? or you motoring insurance? (or RAC or AA).
They should be able to advise you on your rights as it's useful to know when approaching discussions, however I would suggest that discussions with your employer are going to be the best approach to try and resolve this.
If usually got to the stage of a relationship breakdown if people are starting to talk about enforcing their rights and therefore your work relationship may not be good in future to the point of requiring a new job.