Company Vans - Mileage Rate

Jewell77

Hiya - dont know if anyone can help... probably posted this in the wrong place... oops! I've got a company van and work for a national company (dont know if that makes a difference!). The company pay the mileage rate as per the what the taxman states.. i.e. currently 12p a mile.

However, with the rise in fuel costs etc - I've found myself to be more and more out of pocket. Now the van costs me around £75 to fill up (£40 a year ago by the way!)... and on average I'm getting back around £55 in mileage... thus leaving me £20 out of pocket everytime I fill up.

I don't want to make profit on my mileage - but I do want to be reimbursed in full for the business miles that I do... I can't afford to lose £80+ a month on petrol (I fill up at least 4 times a month). I've spoke to the finance director who says that until the Taxman raises the mileage rate there's nothing they can do... meanwhile I've got an additional £80+ to find a month - on top of all the other rising bills (which as a single working parent is a nightmare at the best of times!). If I refuse to drive/do my job, then I'll be subjected to disciplinary action. Any advice? Thanks in advance...

bap98189

Can you clarify exactly what arrangement you have regarding the van. Is this van made available for your private use as well - like a company car, or is it only to be used for work purposes? Who owns the van - you or the company?

DVardysShadow

The finance director is telling a porkie - and as finance director, is either incompetent or knows he is telling a porkie.

They can pay what they like and if they pay too much, the only consequence is that you end up paying tax on the excess.

It would possibly be better for you to be reimbursed out of pocket expenses [fuel] in full and for you to then pay for any private mileage. But we really do need to know the basis on which you run the van.

andya99

Hi Jewell77

Having read through your post several times I agree with bap98189, we need some clarity on the basis on which your employer issued the van to you, however there are several ways a company vans / fuel can be managed generally.

Most companies that issue vans would operate fuel cards / accounts for employees to fill up on, any private mileage, if it is allowed, the employer can ask for reimbursement at the HMRC advisory rate. They were reviewed as of 01.03.11.

For example if you did 1000 miles and 200 of those were private your employer can ask for 200 x 13p (diesel rate) = £26.00 and this would act as their and your proof that you do not get a benefit in kind (BIK) for fuel for the taxman. The BIK for fuel on a van is the tax on £500. The BIK for using a van privately is the tax on £3000.
Where there is no private use there is no BIK. It was a move by Gordon Brown at the time to take thousands of van drivers out the tax system. Using your van very very occasionally on a private basis the taxman does not want to know about e.g. taking something to the tip once or twice a year.

If you are using you own personal van for business use then you can claim so much per mile for business mileage, there is a threshold where is changes after business 10,000 miles.

Using your own van, your employer can request copies of your vehicle documents, check that you are insured for business use and ask to do visual checks on your van as they have a duty of care to ensure your vehicle is okay to use whilst you conduct thier business.

The rate you quote that your employer pays you for all mileage, I think was an old advisory rate (the rate you reimburse the employer for PRIVATE fuel use).

Does your employer not have a vehicle policy that covers the issue of cars / vans? Do you or have you had a P11D from your employer which shows any benefit in kind provided in the previous tax year?

You need to get this sorted and establish the basis on which the van is issued so that you do not leave yourself open to a tax bill.

Can't post links but strongly suggest you head over to HMRC to get info - look for vans and tax, advisory rate, business mileage.


Andy

Bobl

Current HMRC Rates:

Tax - Rates per business mile
Type of vehicle First 10,000 miles Above 10,000
Cars and vans 40p 25p
Motorcycles 24p 24p
Cycles 20p 20p

Link Here:

http://www.hmrc.gov.uk/paye/exb/a-z/m/mileage-expenses.htm

so it looks like they are underpaying you. You can claim tax relief on the difference from HMRC at the end of each Tax Year

Jewell77

bap98189 wrote: »

Can you clarify exactly what arrangement you have regarding the van. Is this van made available for your private use as well - like a company car, or is it only to be used for work purposes? Who owns the van - you or the company?

Hi every1... thanx for all the replies... the van is owned by the company and it is for business use only. I dont believe it's classed as a BIK as the only thing that shows on my yearly statement thing is the private medical cover. Any further advice would be great as I'm planning on phoning the finance director when I'm next in the office (Monday)... I know that they've always followed the taxman's guidance who sets the mileage rates for company owned vans... 12p currently (not the 25p that someone else quoted)... Thanks

bap98189

If the van is owned by the company and only for business use, you shouldn't be paying for the fuel at all. You should either have a fuel card, or be claiming all fuel receipts back as expenses.

andya99

Hi,

Have to agree with bap98189, if your employer has provided the van for business use only you should definiatley not be paying for thier fuel. I don't get asked to pay the electric my computer uses at work so I can do my job, if what your saying is accurate then your employer is on to a good thing!! Getting you to subsidise thier fuel costs.

The rate that your employer appears to be using is (an old) advisory rate for an employee to reimburse the employer for PRIVATE fuel use. Which doesn't apply in yoiur care anyway.

I think your finance director needs to read up and you need to be claiming all fuel at face value through expenses or get them to provide a fuel card.

redpete

Jewell77 wrote: »

the van is owned by the company and it is for business use only.

In that case why doesn't the company pay the full amount that you pay for fuel? This is a legitimate expense entirely made to carry out the work for the company.

The advisory limits for mileage allowances for company vehicles are here:

it sounds like your van is out of line with this assumed mpg figure - a good argument for getting paid against receipts for actual expenditure (or a lighter touch with the right foot ;-))