Company Car Private Mileage

Method

Hi,

My employer currently charges me 25p plus VAT for each private mile in the company car (A 2009 Mini Cooper Diesel)

He is thinking of raising this to 45p to keep it in line with what he pays others to drive their own car for business use (which I never do)

Does this sound right? I checked the HMRC website but it was quite baffling!

Thanks

steve-L

Method wrote: »

Hi,

My employer currently charges me 25p plus VAT for each private mile in the company car (A 2009 Mini Cooper Diesel)

He is thinking of raising this to 45p to keep it in line with what he pays others to drive their own car for business use (which I never do)

Does this sound right? I checked the HMRC website but it was quite baffling!

Thanks

I'm baffled as to why you have a company car that you don't use for business?
Not only from why they pay for you to have it but why that is tax efficient for you?

45p/mile up to 10,000 miles/tax yr is what the company can claim as an expense as tax, 25p is what they can claim after 10,000 miles/yr

Its written like this so if you do less than 10,000 business miles a tax year its not efficient for you to have a company car and efficient for you to use your own (including with taxable car allowance) hence in your position I'd question the rational... you/your employer can't claim to drive to 'your normal place of work' either....so this counts as private milage.

(In my understanding, I'm not an accountant!)

Method

It's a pool car so I don't get taxed on it, I just pay private mileage

jbainbridge

It's not a company car then. He's charging you a rental / usage charge.

Method

Yep, is 45p per mile a reasonable amount is what I'm really asking?

Gilbert2

Method wrote: »

Yep, is 45p per mile a reasonable amount is what I'm really asking?

So the employer is currently paying for the fuel you use privately? Or do you pay it?

You have only stated you are charged for it by your employer.

There is a difference to hire charges for a car and being charged for fuel for that car.

Splott

Method wrote: »

Yep, is 45p per mile a reasonable amount is what I'm really asking?

If they're paying for the fuel, yes. It is the rate HMRC have calculated to include fuel, servicing, running costs.

steve-L

Splott wrote: »

If they're paying for the fuel, yes. It is the rate HMRC have calculated to include fuel, servicing, running costs.

Absolutely true ..... its also simpler accounting....more transparent if that is what people get paid to use their own cars.... (which it is because that's what HMRC say)

However, given this I find that I can easily beat this for myself being paid 45p/mile expenses. A mini Diesel I'd hope to be seriously undercutting

BUT as a rental car (which is what this is) its a fantastic deal! No tax, insurance or anything else to worry about! If you want a 2009 Mini Cooper Diesel then a deal at a flat rate of .45p/mile sounds quite good!

forgotmyname

Unless your spending a week or more touring Cornwall and cover over 1200 miles. Is it a bargain then?

Depends how many miles you cover i guess. Is it worth buying your own car?

Splott

forgotmyname wrote: »

Unless your spending a week or more touring Cornwall and cover over 1200 miles. Is it a bargain then?

Well you'll pay £4500 for the first 10,000 miles. After that it drops to 25p per mile which is pretty much actual running costs per mile.

Assuming owning your own in running costs for a year to do 10,000 would cost £100 road tax, £600 insurance, £60 MOT, £200 servicing, £150 for tyres, £1272 for diesel based on £1.39/l and 50MPG you're paying £2382 just for running costs.

And we've not even deducted a figure for depreciation.

So effectively you're paying £2,117 a year to "rent" the car. You'd pay a hell of a lot more than that a year in finance on a 5 year loan.

Method

Great thanks guys!