Fuel Scale Charges and Commuting

swanny65

I am employed as an investigator in the Civil Service and I use a Civil Service provided lease car. I pay a monthly lease charge and am allowed to use the vehicle for private journeys where appropraite. I am reimbursed at 0.12p a mile for any business mileage. I have a permanent office where I usually work from. I live 2 miles from my permanent office.

My employer requires me to make a home of office deduction if i undertake any work, usually visits or surveillance, on my way to and from the office. No problem with that as I have a travel to work cost and the tax payee should not pay my travel to work costs.

So for example if my day starts with a journey Home - Surveillance - Office with total mileage of 10 miles, I will be paid 8 business miles at 0.12p. Say I then spend all day at the office and go home. If I then do Home - Surveillance - Home later that evening with 10 miles travelled, I will be paid 10 business miles as I had already incurred the return commute earlier that day.

My employer has now decided that any journey made between my home and the office should now be classed as ordinary commuting and this includes weekends when my permanent office is closed.

So for example if i travel Home - Surveillance - Home, Home - Surveillance - Office, Office - Surveillance - Home and Home - Surveillance - Home my employer will expect me to not claim any mileage for these journeys if they fall inside my journey to work area as they will all be classed as normal communting. They is no maximum number of communting journeys I can undertake in a day.

The journeys to work are are defined as up to 10 miles from my home.

Every surveillance / visit journey is solely for the benefit of my employers business and I will get no benefit from that journey, unless it is on my way to or from my permanent workplace when i make a home to office mileage deduction.

Finally if I was to use my own vehicle for any reason I would be paid all mileage at 0.45p, up to to 6000 miles, less a maximum home to office deduction of 2 x £0.24p a day.

Using the HMRC guidance i cant see how my employer's interpretation is correct.

http/www.hmrc.gov.uk/helpsheets/490.pdf

A colleague has been threatened with a full fuel scale benefit charge if dont repay what they have "incorrectly" claimed. However we believe the deduction we presently make are correct.

Can anyone offer any advice.

Nicola_Ed

Hi

Can you clarify? Is your question regarding the amount paid to you or the tax due on these payments? HMRC sets the rules for the tax due on milege payments but not the miles you should be paid for. An employer could not pay you for any business miles and this would not be a matter for HMRC to comment on.

real1314

The issue would appear to revolve around the payment by the employer for fuel for private use. If the employer pays for any fuel for private use at all, even for just 1 mile in a year, a full private fuel scale charge would apply.

However, the private journey can only be what is actually a private journey, which includes ordinary commuting.

In the OPs case I would say that the 2 mile journey each way, totalling 4 miles, and then being deducted from their daily mileage would cover the commuting/private journey element and would remove the risk of a private fuel charge.

I *think* the OP is suggesting that their employer has "decided" that any journey of less than 10 miles should be treated as commuting/private journey and is therefore not payable without incurring the private fuel charge. IMHO this is complete nonsense.

If the employer believes this to be the case, they should be able to provide evidence from HMRC to back up their position? :cool:

agrinnall

If the interpretation that real1314 has made is correct then I'd agree that it's nonsense. However, if it's only journeys up to 10 miles where home is involved then the easy answer is to always go to the office at the start and end of the day, and therefore every other journey is not part of your commute. If they don't like that then tell them they have to come up with an acceptable alternative.

real1314

agri - the way I read it was that even if the OP went from home to the office(2 miles), then out for 6 miles total back to the office, then home (2 miles), then as the total was only 10 miles, they would not be paid.

Otherwise I'd agree with your approach - I used to use this with an intransigent manager - I called it "office tag" - I had to tag the office every day.

:cool:

real1314

swanny65 wrote: »

My employer has now decided that any journey made between my home and the office should now be classed as ordinary commuting and this includes weekends when my permanent office is closed.

This is completely correct. Even a journey on a non-working day would be counted as commuting by HMRC and would result in a Fuel Benefit Charge.

So for example if i travel
1. Home - Surveillance - Home,
2. Home - Surveillance - Office,
3. Office - Surveillance - Home and
4. Home - Surveillance - Home
...my employer will expect me to not claim any mileage for these journeys if they fall inside my journey to work area as they will all be classed as normal communting. They is no maximum number of communting journeys I can undertake in a day.

AFAIK:-
1. Can be claimed in full
2. Can be claimed on the basis of total mileage - home to office mileage
3. As per 2.
4. Claimed in full

The journeys to work are are defined as up to 10 miles from my home.

How have they come up with that?

Using the HMRC guidance i cant see how my employer's interpretation is correct.

The only thing I can think of if the concept of a "Geographically Based employee, but I've never been too hot on how that definition works.


A colleague has been threatened with a full fuel scale benefit charge if dont repay what they have "incorrectly" claimed. However we believe the deduction we presently make are correct.

The employer cannot "threaten" a fuel scale charge, it's a HMRC thing and they don't "threaten", they just apply it if they see it as correct.

I'd get some clarification on how they have come up with "10 miles" - it seems to be completely arbitrary to me. :cool:

Nicola_Ed

Hi

The 490 leaflet does make mention of 10 miles - am not sure how relevant this is to these circumstances but this could be resaon for this being quoted. ( See last line of the text)

Journeys treated as ordinary commuting or private travel4.10 Sometimes an employee may travel to a temporary workplace without that journey

being significantly different from their ordinary commuting journey. Where that happens

the tax rules deny relief in circumstances where, for practical purposes, a journey is very

similar to the employee's ordinary commuting journey.

Example
Keith is a health and safety inspector who lives in Leicester. His office in Nottingham

is 500 yards away from a bean processing plant. When he travels direct from home

to the processing plant he is going to a temporary workplace but his journey is

substantially the same as his ordinary commuting journey so he is not entitled to

any relief.

Example

Kim lives in Pudsey. She travels five miles to work in Leeds where she is a

reprographics manager. One day she is asked to go to Ilkley to stand in for a

colleague who is sick and so travels an extra 12 miles. Her journey to Ilkley is clearly

different from the journey she makes daily to Leeds so she is entitled to relief.

30

4.11 This is intended to be a common sense rule which applies where the journey to or

from a temporary workplace is broadly the same journey as the employee's ordinary

commuting journey. In particular, it will deny relief where employers or employees

seek to turn an ordinary commuting journey into a business journey for the purposes

of obtaining tax relief. The application of this rule will depend on the particular

circumstances of any case but we will not normally seek to argue that a journey to or

from a temporary workplace is substantially ordinary commuting where the extra

distance involved is ten miles or more each way.

swanny65

Hi real1314, agrinnal and Nicola Ed

You are more or less correct in your understanding of what our employer is doing.

1. Any "Office - Surveillance / Visit - Office" mileage will be paid in full.
2. The 10 mile rule applies to anyone who undertakes a journey of 10 miles or less, it is not that the first 10 miles not paid whatever mileage you do.
3. The employer appears to be saying that there is no limit to amount of commutes that can be done in a day. So for example if i go into the office and do a days work but that night do 3 separate periods of visiting or surveillance, if those journeys are made between my home and workplace, then they will be classed as commuting as they are on my route to work.
4. Thanks for this point on weekend attendance at the office. This is completely correct. Even a journey on a non-working day would be counted as commuting by HMRC and would result in a Fuel Benefit Charge.
5. The employer has said they will add the fuel scale charge to the P11D. In my experience the HMRC will automatically apply that to our tax code.
6. Later today we were advised we cant just drive to the office and start the journey from there to avoid the charge, as we have to do meaningful work at the office to justify our attendance at the office - that's pretty difficult at 23.00 or 05.00 hrs !!!
7. I agree with Nichol Ed on the reasons behind the 10 mile rule. However i always deduct 4 miles home to office deduction (2 x 2 miles) if i work at an alternative office / spend all day visiting.

A couple of additional questions

1. Can an employer assume an employee makes more than one commute a day?
2. The employer refuses to publish any HMRC received instruction / advice, do we have a right to see this.
3. If we wanted to appeal do we appeal can we appeal to HMRC before the end of the tax year. If I wait i will be look at paying an additional £70.00 pcm income tax if this carries on. Alternative we stop doing any surveillance.

Thanks

swanny65

real1314 wrote: »

The issue would appear to revolve around the payment by the employer for fuel for private use. If the employer pays for any fuel for private use at all, even for just 1 mile in a year, a full private fuel scale charge would apply.

Agreed

However, the private journey can only be what is actually a private journey, which includes ordinary commuting.

Agreed

In the OPs case I would say that the 2 mile journey each way, totalling 4 miles, and then being deducted from their daily mileage would cover the commuting/private journey element and would remove the risk of a private fuel charge.

Exactly - 2 x2 is 4 miles. How can the employer assess my commute as unlimited and base it on the amount of individual journeys undertaken on a daily basis.

I *think* the OP is suggesting that their employer has "decided" that any journey of less than 10 miles should be treated as commuting/private journey and is therefore not payable without incurring the private fuel charge. IMHO this is complete nonsense.

Only if the 10 mile journey is in the direction of the workplace. Fortunately my colleagues and I all live no more than 3 miles from the office

If the employer believes this to be the case, they should be able to provide evidence from HMRC to back up their position? :cool:

Thanks will look into this

real1314

I think this is a conflict between HMRCs approach to business journeys and the employer's.

HMRC take the view that a business journey can be fully claimed, without any deduction at all for normal commuting, but if the journey is not significantly different from the normal commute, they do not allow it.

e.g If you live in Warrington and work in Manchester with a normal journey of 20 miles, that is your normal commute.
If you are asked to work in Salford, 2 miles closer to home, the journey is not significantly different (it's in the same direction, just a shorter journey) so you can't claim.
But if you were asked to work in Liverpool and travel 18 miles the opposite way, you could claim for 18 miles without any deduction for any normal commute costs.

Quite where HMRC draw the line (angle?) that turns significantly the same into not the same I have no idea - would Warrington to Stockport or Bolton be significantly the same?

However, all this is really a bit distracted from the OP's scenario. HMRC are basically (and probably rightly) trying to stop the OP from claiming the entire journey from home to surveillance to office (say it's 4 miles rather than the 2 from home to office) as a business journey at 4 miles without any deduction. The deduction of the 2 miles however negates this concept.

I *think* the OP should be claiming for one journey a day where they have to knock off their home to office miles both ways, but any home to surveillance and back to home should be claimable in full.

I don't know if HMRC can provide some clarification on this, but I'm sure your employer should be able to, even if they have to contact head office for advice? :cool:

swanny65

Hi real1314

You have hit the nail exactly on the head and that is how my colleague and I believe the rules should be implemented....

I believe we are the only government department that insists on a home to office deduction. I believe that came in about 5 years ago as a result of the underlying fuel scale implications. To be honest I think it is fair enough.

Oddly enough this has been kicking around in our Dept since the start of April and to be fair our managers have been trying to get the reasons for the revised implementation. It reared its head when a colleague was contacted and asked to explain his mileage claims. Followed by the threat of a fuel scale charge.

The employee looking at his expenses refused to issue him the HMRC guidance, they probably don't have any and have just been told to check the claims.

In the absence of any instruction I will be refusing to co-operate. Meanwhile I intend to write to HMRC for clarification on the number of commutes a day / their interpretation of the guidance.

Thanks very much for your time on this one.

Much appreciated.