personal car business use - pence per mile question

bovril

I have a personal contract hire vehicle and when i took my new job they offered to pay for it. all well and good it is paid on top of my expenses. i pay for insurance, tyres etc and i am paid per mile for my business use. The question is should i be paid at the lower rate as a company car 15p for my 2L diesel or the personal rate of 45p per mile for 1st 10K etc ?

i'm confused and its a huge difference, any advice welcome

phill99

I would have thought the higher rate. How you ave 'purchased' your car is academic.

Aretnap

I believe it's ultimately a matter for you and your employer to come to an agreement on. The 45 and 15p rates aren't entitlements written into employment law - they're just the maximum HMRC will allow your employer to give you without paying tax. Between them they're supposed to represent the overall cost of running a car, including depreciation/lease costs, maintenance, insurance, petrol etc. If the company is paying the full leasing costs that's already a lot of money towards running your car, so I wouldn't expect 45p a mile on top of that. But if the car is mainly for business use then arguably they should be paying for more than just the cost of petrol as you're paying insurance, tyres etc. OTOH if you're getting substantial personal use out of it and essentially you're getting a personal car for the cost of insurance and the odd tyre, that sounds like a pretty good deal to me.

sunshinetours

bovril wrote: »

I have a personal contract hire vehicle and when i took my new job they offered to pay for it. all well and good it is paid on top of my expenses. i pay for insurance, tyres etc and i am paid per mile for my business use. The question is should i be paid at the lower rate as a company car 15p for my 2L diesel or the personal rate of 45p per mile for 1st 10K etc ?

i'm confused and its a huge difference, any advice welcome

When you say they are paying it on top of expenses, do you mean as additional pay that is then taxed/NICed?

If so then you certainly have an argument to claim the 45p rate although they certainly do not have to pay it

If you are being paid the 15p rate then you would in this circumstance be able to claim the tax back on the difference between the 15p and 45p/25p after each tax year.

IF on the other hand you are simply being paid the PCP payment without any tax deduction on it each month by your employer, you have a potential tax issue and need further advice (more so your company to be honest).