Business Expenses

penthouse89

Hi All,

Been a lurker on these forums for a while, decided to join up and make a post.

My job involves travel in my own vehicle, usually to customer sites. The problem I have is that my milege claims are often for more than a week's pay per month, and are not paid on time, leaving me in the lurch.

My company pays me at 40ppm for business miles (I have to claim the other 5p of my entitlement through tax relief. I, by far, do the highest mileage of anyone in this office (in total, I do around 13,000 business miles per annum, in addition to my 300 mile a week commute).

This often means my mileage claims are for £400+. The claim months run 11th-10th of the month, all claims must be submitted on the 10th for payout on the 15th. For the last couple of months, this payout has been late, causing me servere cash flow problems.

I don't have the most economical car these days, I ditched the flashy new one because the payments were far too high, I drive a 13 year old, 2.0 petrol saloon car. it averages around 35mpg. I'm more than happy to pay for my 300+ miles commute, but I am effectively giving my company a 5-6 week line of interest free credit, and it causes bitterness on my part, when I'm putting my last few pounds in as petrol to get to work in the middle of the month, I know that my company owe me £400 and might pay it before I run out of cash.

Can anyone offer any tips or advice as to what to do in these situations? I can't really afford to give my firm this line of credit. If I run out of money before they pay it out, what can I do? I've often had to borrow short term from friends and family, but this isn't fair on them or myself. Last month payout didn't occur until the 21st and I couldn't get into the office for a couple of days because I'd no money. If I budget my monthly salary, it works out that I should have a sufficient amount of spare cash to save, however, this ends up being put in my tank as fuel for business miles, and I can never predict how many times I'll need to travel for work. I'm under 25 so I can't use a company vehicle, they won't give me a fuel card (I could just top my tank up at a rate of 40ppm).

Once insurance, tyres, maintanence and of course fuel are covered, I end up out of pocket.

It is the 15th today - and so far, no payout. Emailed accounts and they say tomorrow. I'm now in the position where if I come into the office tomorrow, and they don't pay out, I'm stuck. Things are that close.

InsideInsurance

So, you are using approximately £185 of fuel a month and in return receiving approximately £435 a month but 6 weeks in arrears

Whilst there are other costs involved in running the car (eg tyres) they are not monthly costs. You presumably would have a car anyway so would have insurance to pay and mileage makes little difference. So as soon as you got past the first 6 weeks you should have the funds

penthouse89

Month to month I put approximately £350 in fuel. My car is business insured for my own peace of mind, this adds around £400 p/a to my premium. My mileage is almost double what it would be if I just commuted with the car.

In addition, this means I'm shelling out for tyres twice as often, and the car requires a service four months on average.

joolsybools

Ask your employer to cover your business insurance if you have to use it for business, I know some employers will pay this, do HR have a policy about it?

InsideInsurance

penthouse89 wrote: »

Month to month I put approximately £350 in fuel.

£350 is ~60 gallons and your doing ~1080 miles per month and so you are getting 18mpg not 35. Sounds like a new car is needed

penthouse89

According to my HR Manager, the 40ppm should cover the running of the car for business, including any insurance a remedial work required during the course of it's use. Fuel doesn't cost me 40ppm, so the difference should cover the business insurance and the percentage of wear and tear incurred.

It does, however, mean I put stratospheric miles on cars, hence the old banger. No point in having a new car, as it'd depreciate like a Steinway falling from a tower block. My last one did.

penthouse89

InsideInsurance wrote: »

£350 is ~60 gallons and your doing ~1080 miles per month and so you are getting 18mpg not 35

I do 1200 miles personal - 300 per week to work and back, in addition to around 1000-1100 business.

fed_up_and_stressed

Well you could ask for a company car and a fuel card however any costs from the 40p a mile that you aren't paying out straight away e.g the bits towards repairs /tyres etc wouldn't then be in your bank account earning interest so its a tricky one.

InsideInsurance

Your personal mileage is irrelevant to the matter, your business mileage is all that matters.

So, if 35mpg is correct then your talking around £185 a month for business fuel and your receiving £435 a month in allowance.

£400 extra insurance sounds very high but even if thats true then its another £35 a month and so a total of £220 a month and your getting £435 in allowance

On the surface, an extra £215 a month should be covering your servicing and tyres and given these arent monthly costs then you shouldnt be struggling once you've gotten past the two months or so.

penthouse89

My company won't provide a vehicle, sadly, because of my age. Anyone using a company vehicle would have to be over 25 - and I'm 23.

I'm just wondering if anyone can suggest how I can continue and not remain out of pocket for half of the month. It also doesn't help that my costs are neither predictable nor regular, for example, I might do 500 miles in one week on business, then 150-200 a week thereafter.

It also means I need to keep a certain amount of money aside every month to use for business - a float. I don't know if this is right - but it doesn't seem like it. I shouldn't have to float my own expenses, should I?

penthouse89

InsideInsurance wrote: »

Your personal mileage is irrelevant to the matter, your business mileage is all that matters.

So, if 35mpg is correct then your talking around £185 a month for business fuel and your receiving £435 a month in allowance.

£400 extra insurance sounds very high but even if thats true then its another £35 a month and so a total of £220 a month and your getting £435 in allowance

On the surface, an extra £215 a month should be covering your servicing and tyres and given these arent monthly costs then you shouldnt be struggling once you've gotten past the two months or so.

It's probably nearer £200 just in business fuel - depending on where I fill up and how the car is driven, sometimes less, sometimes more. The £35 per month extra cost is based on what Tesco charged me to cover me for business, I am 23 and have three points running on.

A service costs around £80 a time, I'm finding a set of tyres is lasting around 5 months at just under £600 a set. Obviously, my own mileage wears the tyres, too. This is without other costs that pop up in the course of owning a car.

The problem I have is that the payout is late almost every month, and if I've travelled a lot the week before payout, it eats any money I have left up. I'm wondering if there is any other solution I could suggest to my employer so that I'm not floating their costs...

To clairfy, I know I make money on my business mileage - technically, but I'd sooner not have the hassle of putting sometimes £100 a week in fuel in my car then having to wait six weeks to make £150, I'd sooner not have to pull the £100 in the first place.