Employee business mileage - 'notional home to work' mileage

anneleyskiing

I am an employee and my employer recently revised its travel and subsistence scheme. This has introduced the idea of ‘notional Home to Work deduction.’ which the scheme it replaced did not have. Here is an extract:-

“If it is practical to do so (such as at the beginning of the working day), individuals should begin journeys from their home rather than their base. This would only be possible if the journey length is shorter by setting off from the individual’s home rather than their base.

Individuals should deduct the notional home to base miles that would have been incurred, had the individual travelled to their base, from the mileage being claimed for the journey.

Wherever possible, the car’s mileometer readings should be used to determine actual mileage, rather than estimated calculations.

Example: Return home to base mileage is 50 miles. Business mileage travelled is 80 miles. The travel claim is for the net difference of 30 miles”

I live 59 miles from my permanent workplace and commute by driving 10 miles to the railway station and then getting the train (£13.80 fare).

I am required under my contract of employment to work at a temporary workplace which is 77 miles from my home. The distance between my permanent workplace and the temporary one is 32 miles. My permanent workplace is not ‘on the way’ to the temporary one. My home and the two workplaces are on 3 points of a triangle. I can get to the temporary workplace by train but only if I am not required to be there before 10am due to the train timetables.

Having checked the HMRC website I am confident that my journey to the temporary workplace is business mileage (http://www.hmrc.gov.uk/incometax/relief-mileage.htm) That site also says that :-

“Only two types of journey count as business travel:
• journeys that form part of an employee's employment duties (such as journeys between clients' premises by a salesperson)
• journeys that relate to an employee's attendance at a temporary workplace

Also the scheme does not seem to have envisaged my scenario, where my journey is longer by setting off from my home rather than my base.

Under the new scheme my employer has indicated it will only pay me the difference between my ‘notional mileage to work’ and the travel to the temporary workplace ie,

77 miles – 59 miles = 18 miles x 2 (return) = 36 miles x mileage rate of 45p per mile = £16.20.

As an aside, my commute to my permanent workplace costs me (if calculated at 45p per mile) 10 miles x 2 (return) x 45p = £9 plus £13.80 rail fare = £22.80

If my employer paid the business mileage in full I would receive:
77 miles x 2 (return) x 45p = £69.30

I have pointed out to them that this is not in line with HMRC examples (see http://www.hmrc.gov.uk/manuals/eimanual/EIM32011.htm ).(eg 4 and 6).

http://www.hmrc.gov.uk/manuals/eimanual/EIM32300.htm says that :
‘A journey to a temporary workplace that takes the employee in a completely different direction to his or her ordinary commuting journey is not substantially ordinary commuting even if the distance is the same.’

It seems that I’m able to claim tax relief but will have to do a Self Assessment tax return and fill in a form (P87 I think). See Direct Gov link http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/IncomeTax/Taxallowancesandreliefs/DG_078326

I don’t really understand this process though. Will it mean that the HMRC will give me a tax rebate of £53.10 for each journey I do (ie £69.30 I can claim less £16.30 received)?

I feel that I have a grievance with my employer but want to be sure of my facts before I go back to them or approach the HMRC for advice.

I do this journey between 2 – 6 times per month, so over a year the sums would not be insignificant, to me at least, though no where near the 10,000 miles per year HMRC cut off point for the standard relief.

Questions:
What am I entitled to claim from my employer?
What relief or rebate can I get from the HMRC if my employer refuses to pay for all the business mileage?

Thanks in advance

GRM

IMO, you currently drive 10 miles to work and now you'll be driving 77 miles. Your employer should pay for 67 miles.

BoGoF

As far as HMRC are concerned your employer can have any reimbursement policy it wants (subject to the maximum AMAP rates) so they can pay you between 0 and 45 pence per mile. They can also 'disregard' any mileage they want. Whether this change of terms of conditions breaches any employment legislation is a question for another board.

Turning now to any shortfall in reimbursement, you get tax relief on it not the actual amount rebated. So in your example you would get tax relief on £53.10 which, depending on your marginal rate of tax, will be 20% or 40% of £53.10.

anneleyskiing

Thank you for the replies. I will post something on another board regarding the employment rights issue. It does not seem fair that I will have to pay out of my taxed income for performing a duty under my contract of employment.

jennifernil

How much in total does it actually cost you to get to your normal place of work? (I'm not sure that you can reasonably calculate the miles driven @ 45p here)

And how much will it actually cost you to get to the temporary place of work? Presumably slightly more?

Will the amount offered by your employer cover this difference? If so, you need to consider whether you are actually being treated unfairly.

The tax position is a different matter.

Are you going to drive to the temporary workplace? I would think you can only claim the relief on the 45ppm if you actually use the car for the journey. Otherwise it would be a mixture of mileage and train fare.

00ec25

anneleyskiing wrote: »

. Example: Return home to base mileage is 50 miles. Business mileage travelled is 80 miles. The travel claim is for the net difference of 30 miles”

77 miles – 59 miles = 18 miles x 2 (return) = 36 miles x mileage rate of 45p per mile = £16.20.

in principle what your employer is doing is saying that they will only pay you expenses where you have incurred extra cost in getting to your alternative location. This is fairly common - you chose to live 59 miles from work therefore the employer expects you to pay the commuting cost of 59 miles for every trip you do since it is your choice to spend that much on commuting

now in relation to your query.

1. the policy wording is not that clear, it would have been a lot simpler to state (as do mine) that the total cost of commuting (so in your case car + train) must be deducted from every travel claim, as i see it you can claim £16.20 per round trip

2 HMRC are not concerned with your employer's rules , and the employer does not have to follow HMRC's examples

3 if you are certain you meet HMRC's definitions under temporary workplace (be careful HMRC are very keen on this one since as you well know "normal" commuting is not an allowable expense) then you can claim the tax on the 59 miles which your employer does not fund (ie 59 x 45p x 20% or 40% etc)

00ec25

GRM wrote: »

IMO, you currently drive 10 miles to work and now you'll be driving 77 miles. Your employer should pay for 67 miles.

the OP uses car and train on their normal commute - why do you think the employer should have to foot the bill for the mileage the Op would normally do by rail?
the employer should fund the extra cost of the new location