Tax on mileage expenses

jimmo

BevieB wrote: »

When applying home-office deduction it seems that the amount we are deducted is based on petrol used only as the rate is calculated from the PUS/lease car figures or we can use the cost of a season pass for bus etc if lower. Therefore the deduction is the actual cost of the petrol/bus which we would have paid and does not take into account running cost of car which is included within the 0.45. Hope this makes sense.

That really does sound weird but, as I said before, HMRC have no control or direct influence on your employer’s travelling and subsistence policy.

.

In Tax terms, as you live 2 miles away from your office, a journey from your home to a customer’s home will be a business journey unless the customer lives within a street or two of your office. If that were the case your journey would be substantially similar to your normal commuting journey and not allowable for tax purposes.

So in tax terms you are in exactly the same situation as I was when I was working. You claim from your employer the travelling expenses your employer is willing to pay and you claim tax relief on the difference between what the taxman sees as your legitimate travelling expenses and the amount your employer actually pays you.

In my own case, I felt it was rather ironic that I claimed expenses from my employer, HMRC, and then claimed tax relief from HMRC in respect of tax allowable expenses that HMRC was not prepared to pay but such is life.

Looking again at your original question, your problem seems to be that your manager suddenly seems to be trying to impose a new interpretation of your employer’s (DWP) travelling expenses policy. Does that mean that you, and perhaps the rest of your office have been getting it wrong in the past and he is simply imposing a correct interpretation of long established rules?

Does it mean that the DWP travelling expenses policy has recently been revised and you manager is simply imposing the new rules?

Does it mean that your manager is under pressure to reduce the office budget and is overstepping the mark by trying to impose something which he feels is appropriate but he is actually breaching the employer’s travelling expenses policy?

One way or another your problem seems to be with your employer rather than with the taxman.

I would suggest you take your problem to your union and the Employment, Job Seeking and Training forum here. However you have to realise that you may be opening up a bucket of worms.

In post #4 you seem to be implying that on days that you undertake business journeys and visit your office your employer will pay your car parking costs for popping into the office. There is no way that this is allowable for tax purposes and you should be paying tax on the car parking costs that your employer pays.

John_Pierpoint

Does this office have a function in your life, other than an occasional meeting room and an accounts department to which you are required to send your expenses form once a week/month?
I agree with the original poster that when a car is used for commuting, its owner has chosen where to live and has to buy and use a car for life style reasons - so it is the car owners responsibility to pay those costs related to ownership and maintenance. The additional costs of getting to work on a marginal basis are represented by the (joke?) rate of 13p per mile, so that is what should be deducted from the expenses claim on the days when the servant does not attend at the master's place of work.
Now if the master wants the servant to do a task, he should be required to provide the servant with the minimum adequate tools for the job OR be prepared to pay the servant a rate that covers the full absorption cost of the servant buying and maintaining his own tools - ie 45p per mile.

But just before the OP gets the sensation that I am totally on their side - here is a little bit of history from the 1970's:
I had a job that required me to travel in Europe on matters concerned with accounting for tax. I would like to think that I did this job because of talent BUT it just might have been that in the 1970's UK servants were dirt cheap compared to some Continental wage rates.

One place that gave me problems was near Maastrich, where the government was paying subsidies to try to mop up unemployment/low wages. The problem concerned "returnable" packaging (made from stainless steel) The Dutch were paying for 50% of it and the rest of the European operation (especially the UK) were "forgetting" to return it (Think beer kegs and you get the idea). The Dutch civil servant, who was responsible for managing this situation, used to visit the factory in his customs uniform and on his scooter.

So there we have it, if your boss refuses to pay for the use of your own tools - do the job on a push bike and insist on being paid the going absorption rate of £0.20 per mile. It is win win, you will actually show a tax free profit and be as fit as a fiddle into the bargain.

[If this government ever actually does manage to cut government spending and reduce the fiscal deficit, not to mention the oil trade deficit and the carbon legacy problem ; this won't be so much of a joke

If they don't our kids will all be going to work on push bikes anyway - expect a vote for the latter option in next week's local elections]

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

DCodd

OP - I can see no reason why your first and last journeys need to be taxed, especially as you are deducting home- office mileage. However HMRC regulations have very little to do with your situation. The payment of your expenses, the rates and what you are allowed to claim should be detailed within your contract, if not then the history of the payments and what can be claimed may constitute an implied term and condition.

You need to check your contract to see if your company are breaching the agreed terms. A change to your expenses should constitute a change to your terms and conditions and in most cases should require your agreement.

BevieB

John_Pierpoint wrote: »

Does this office have a function in your life, other than an occasional meeting room and an accounts department to which you are required to send your expenses form once a week/month?
I agree with the original poster that when a car is used for commuting, its owner has chosen where to live and has to buy and use a car for life style reasons - so it is the car owners responsibility to pay those costs related to ownership and maintenance. The additional costs of getting to work on a marginal basis are represented by the (joke?) rate of 13p per mile, so that is what should be deducted from the expenses claim on the days when the servant does not attend at the master's place of work.
Now if the master wants the servant to do a task, he should be required to provide the servant with the minimum adequate tools for the job OR be prepared to pay the servant a rate that covers the full absorption cost of the servant buying and maintaining his own tools - ie 45p per mile.

But just before the OP gets the sensation that I am totally on their side - here is a little bit of history from the 1970's:
I had a job that required me to travel in Europe on matters concerned with accounting for tax. I would like to think that I did this job because of talent BUT it just might have been that in the 1970's UK servants were dirt cheap compared to some Continental wage rates.

One place that gave me problems was near Maastrich, where the government was paying subsidies to try to mop up unemployment/low wages. The problem concerned "returnable" packaging (made from stainless steel) The Dutch were paying for 50% of it and the rest of the European operation (especially the UK) were "forgetting" to return it (Think beer kegs and you get the idea). The Dutch civil servant, who was responsible for managing this situation, used to visit the factory in his customs uniform and on his scooter.

So there we have it, if your boss refuses to pay for the use of your own tools - do the job on a push bike and insist on being paid the going absorption rate of £0.20 per mile. It is win win, you will actually show a tax free profit and be as fit as a fiddle into the bargain.

[If this government ever actually does manage to cut government spending and reduce the fiscal deficit, not to mention the oil trade deficit and the carbon legacy problem ; this won't be so much of a joke

If they don't our kids will all be going to work on push bikes anyway - expect a vote for the latter option in next week's local elections]

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

Hi, The office is classed as my permanent place of work I spend approx 2hours at day there.
Although the idea of using my bike seems good I do approx 25 miles a day and although I like to be fit I think it would take to much time plus I would look a right state arriving at my visits.
I have just heard that the Union are taking this up so I hope they can sort this mess up.

BevieB

jimmo wrote: »

That really does sound weird but, as I said before, HMRC have no control or direct influence on your employer’s travelling and subsistence policy.

.

In Tax terms, as you live 2 miles away from your office, a journey from your home to a customer’s home will be a business journey unless the customer lives within a street or two of your office. If that were the case your journey would be substantially similar to your normal commuting journey and not allowable for tax purposes.

So in tax terms you are in exactly the same situation as I was when I was working. You claim from your employer the travelling expenses your employer is willing to pay and you claim tax relief on the difference between what the taxman sees as your legitimate travelling expenses and the amount your employer actually pays you.

In my own case, I felt it was rather ironic that I claimed expenses from my employer, HMRC, and then claimed tax relief from HMRC in respect of tax allowable expenses that HMRC was not prepared to pay but such is life.

Looking again at your original question, your problem seems to be that your manager suddenly seems to be trying to impose a new interpretation of your employer’s (DWP) travelling expenses policy. Does that mean that you, and perhaps the rest of your office have been getting it wrong in the past and he is simply imposing a correct interpretation of long established rules?

Does it mean that the DWP travelling expenses policy has recently been revised and you manager is simply imposing the new rules?

Does it mean that your manager is under pressure to reduce the office budget and is overstepping the mark by trying to impose something which he feels is appropriate but he is actually breaching the employer’s travelling expenses policy?

One way or another your problem seems to be with your employer rather than with the taxman.

I would suggest you take your problem to your union and the Employment, Job Seeking and Training forum here. However you have to realise that you may be opening up a bucket of worms.

In post #4 you seem to be implying that on days that you undertake business journeys and visit your office your employer will pay your car parking costs for popping into the office. There is no way that this is allowable for tax purposes and you should be paying tax on the car parking costs that your employer pays.

The department used to provide parking spaces as we were classed as essential users. Our new office has no spaces so our manager allows us to claim 1-2 hours parking as if we return to the office late afternoon as there is no street parking by this time. If we worked in the office all day it would have been possible to find parking on the road.
So this means I either pay for doing the visit out of own purse if going home to write up days visit or I go back to office and pay tax on parking I would not have required if I had been in office all day!

John_Pierpoint

BevieB wrote: »

Hi, The office is classed as my permanent place of work I spend approx 2hours at day there.
Although the idea of using my bike seems good I do approx 25 miles a day and although I like to be fit I think it would take to much time plus I would look a right state arriving at my visits.
I have just heard that the Union are taking this up so I hope they can sort this mess up.

Yes that would be 2 - 3+ hours cycling, depending on traffic and topology, but "Lycra" might suit you.:j
I used to share an office with a former tax official and he had happy memories of the tax claims put in by "Prudential Insurance" salesmen for their bikes.
You don't say what job you do but do your customers have the sort of neighbours who would steal your bike?
Perhaps the whole office with the help of the Union should insist on doing the job by bike because you are losing money on running cars?!? That should create an LHR immigration type backlog. Perhaps the management would call the bluff of their staff?

BevieB

John_Pierpoint wrote: »

Yes that would be 2 - 3+ hours cycling, depending on traffic and topology, but "Lycra" might suit you.:j
I used to share an office with a former tax official and he had happy memories of the tax claims put in by "Prudential Insurance" salesmen for their bikes.
You don't say what job you do but do your customers have the sort of neighbours who would steal your bike?
Perhaps the whole office with the help of the Union should insist on doing the job by bike because you are losing money on running cars?!? That should create an LHR immigration type backlog. Perhaps the management would call the bluff of their staff?

I like the idea of doing my visits on a bike. I just checked our rates and I would get 0.20per mile. My travel area is near the sea so some good cycle paths/outlook. The only problem is some of the areas I visit can be a bit rough. I will chat to the other visiting officers and look into it. They may need to give me a bit more time to do all the visits!!
I have just telephoned our Complex querries team who have confirmed that if I did not claim expenses from last visit to home I would not need to deduct home-office expenses. So at least I can feed back to my manager as she was making me deduct this twice.
This makes me glad I deal with benefits and not tax.