stopped fuel allowance

littlebrick

My partner has been told that his .40p per mile fuel allowance is to be stopped with immediate affect from today. It was given to him when he agreed to new terms of contract in Aug '08, and equates to somewhere between £6.500 and £8,000 a year almost a third of his salary. Can his employer do this, should my partner have been given notice of change to his contract and earnable income? Any advice would be gratefully recieved :(Littlebrick.

Beast

A lot of organisations don't pay the full HMRC recommended 40p per mile allowance.

He can claim the difference for business mileage as tax relief by completing a P87 form at the end of each tax year.

Googlewhacker

They can change a contract with or without the other person agreement. If the other person disagrees then they have to follow a particular procedure to do this.

http://www.direct.gov.uk/en/Employment/Employees/EmploymentContractsAndConditions/DG_10028079

Above is why contract's can change

http://www.direct.gov.uk/en/Employment/Employees/EmploymentContractsAndConditions/DG_10037116

Above is what you can do if you disagree.

1984ReturnsForReal_2

Why does he get fuel allowance for?

IE what does he do for it, how many miles etc?

jimbms

You don't say what is job is, if the milage for work related travel then they must either pay an amount or provide a vehicle, they cannot make an employee pay for fuel if they have previously provided it. I believe they can limit the payment to the cost of fuel only and he has to claim the rest as tax relief but as said you should now take legal advice.

Zazen999

Presumably he will stop doing any work journeys as a result then.

lucylucky

Zazen999 wrote: »

Presumably he will stop doing any work journeys as a result then.

My thoughts exactly.

bezzza

I'm wondering if the OP (and I am hoping I am wrong) is more worried that they are losing "income" - managers I worked for in the past abused the mileage allowance system something wicked in order to make their salary up - I thought the mileage allowance was to cover petrol, vehicle wear and tear and possibly road tax/insurance (somebody correct me if I'm wrong).

Hammyman

bezzza wrote: »

I thought the mileage allowance was to cover petrol, vehicle wear and tear and possibly road tax/insurance (somebody correct me if I'm wrong).

It is but I claim £80 for a 200 mile round trip that just about costs me £20 in diesel. There's no way wear and tear and tax/insurance costs £60.

jimbms

Hammyman wrote: »

It is but I claim £80 for a 200 mile round trip that just about costs me £20 in diesel. There's no way wear and tear and tax/insurance costs £60.

And if you are using your car regular for work then what about the cost towards purchase as you are saving the company having to buy or lease a vehicle.

wuckfit

Bear in mind that many insurers will increase your premiums if you are using your car for business as well as SDP (Social, Domestic and Pleasure). In fact some insurers load your premium for travel to and from work, let alone business use. If you don't declare business use to your insurer, you may find that they refuse to pay out if you have an accident on company business. the cost of fuel, servicing, road tax, insurance, tyres etc, depreciation of the vehicle all add up, and that 40p/mile doesn't really look that attractive any more. That said, If you're doing 50,000 miles a year in your own car, that's £20k, which will more than cover it, even allowing for around £8k in fuel bills, another £2k on servicing and tyres for a family sized car, like a Mondeo, Vectra etc. Though the depreciation on a 3 year old car with 50k/year mileage will be pretty eye-watering.