Business mileage - am I being fairly reimbursed?

LivvyKeegs

Hi, this is my first post on the Forum, please be kind

I just started a new job - full time, permanent position. I'm based in the company's London office and commute by train from my home in Essex with an annual travel card including London Underground Zones 1-6 at a cost of £4,500+ per year. However, from time to time (approx once a week) I am expected to drive my personal car to another office, outside of the capital - in Buckinghamshire, the other side of London from where I live.

In order to get to the secondary office I must drive 70+ miles each way. However the company has only committed to reimbursing me the distance between the two offices, which is only 23 miles each way (at 45p/mile).

I *could* in theory get to the secondary office by train, i.e. a 90 minute journey into and across London (which is about the length of my normal commute) followed by an additional hour's travel from London out the other side. So I would obviously prefer to drive as it would save me about an hour each way.

My question is, given that I do not commute by car to my normal place of work, am I being fairly reimbursed? A quick search online shows that I can claim tax relief from HMRC on the mileage that my company does not pay me for. I do understand that the company is not obligated to provide me with mileage reimbursement, but since I am already spending the best part of five grand on train travel I don't really see why I should be out of pocket (if I drive) or significantly inconvenienced (if I get the train).

What are your thoughts on my options?! Thanks so much in advance

kevjarvisuni

Hello,
you can download a form - just Go*gle 'form p87' and use this to recover any further business expenses that are not reimbursed by your employer.
Alternatively you could complete a self assessment tax return but if it is only the business mileage that you are short by, I wouldn't bother with that.
You can go back a few of years but you'll need a separate form for each year.
Hope this helps

LivvyKeegs

Hi, thanks so much @kevjarvisuni.

The P87 is indeed the form that I found in my initial research. Presumably this only gives me tax relief on the mileage, I'm not sure how this is calculated but I guess this would be at the rate of tax that I pay, plugged into some formula along with the miles for which I was not reimbursed...however I wondered whether I could make a reasonable case to my employer that they should reimburse me for the full journey at 45p/mile, and would HMRC allow them to do that?

kevjarvisuni

I see what you mean.
Yes with a P87 it is just the tax relief you'll receive - so it reduces your taxable income by the amount. HMRC won't give you the 45p only effectively reduce your salary by that much - sounds like you are already familiar with this process anyway.
In terms of getting your employer to pay what you (and I ) feel they should pay for the full journey from your home to the temporary place of work not just the distance from your usual place of work to the temporary place of work.

Have you queried this with your new employer yet? If it was me I would search for something on the HMRC site that proves that if you are required to travel to a temporary place of work that you are allowed to recover the full mileage cost (obviously the employer is not obliged to pay any mileage at all but they receive up to 45p tax deduction against their taxable profit so it is in their interest to do so). if you search EIM32081 this is an example set up by HMRC that gives the sort of answer you want. EIM32065 also gives the general definitions and links to other EIMs.
As long as you don't go over 45ppm I would put a lot of effort into speaking to your employer.

Sorry, I have kids running around me and I keep trying to re-read what I have written but can't concentrate so to summarise -
- You should query it with your employer.
- They can pay you up to 45ppm and claim tax relief on it.
- Anything above this they will need to pay class 1a NI and you'll have a tax liability.
- HMRC will allow your company to pay you mileage to you from YOUR HOME to a temporary place of work and not just from your main office to a temporary place of work.
- There are manuals on HMRC site which are very useful and can support your request.

Nebulous2

This is entirely normal. Work journeys generally count from your base to wherever you are going and back again. Your company policy should explain it.

custardy

Nebulous2 wrote: »

This is entirely normal. Work journeys generally count from your base to wherever you are going and back again. Your company policy should explain it.

agreed. Same for my employer.
However I'm seeing the crux here being if the OP is required to drive as part of their contract.
In reality they are paying fuel to work they wouldn't have to pay with their train pass getting to their home office.

LivvyKeegs

Thanks everyone for the brainstorming.

custardy wrote: »

However I'm seeing the crux here being if the OP is required to drive as part of their contract.
In reality they are paying fuel to work they wouldn't have to pay with their train pass getting to their home office.

Yes @custardy this is my thinking too. Nothing is stated in my contract about driving, but the (secondary) office is in such an inconvenient location for me that driving is really the only feasible option. In principle I understand why the policy is the way it is, but I'm feeling disgruntled because I'm essentially paying twice for my journey to work on the days that I am required to attend the secondary office...I guess I'm unlucky because my journey to my permanent place of work is already so far from where I live, and the secondary office is further still

elounda_2

Just doing the figures here but if you are getting 45p a mile for 46 mile round trip that's just under £21.00 unless you are driving a gas guzzler then 140 mile journey would not cost you that much so you are not really out of pocket are you?

Nebulous2

custardy wrote: »

agreed. Same for my employer.
However I'm seeing the crux here being if the OP is required to drive as part of their contract.
In reality they are paying fuel to work they wouldn't have to pay with their train pass getting to their home office.

That might depend on what their contract says. However my reading is that they don't have to drive, they only have to get themselves to the second site once a week.

Even if their work agreed to pay it they might have a tax liability for the difference between home to office B and office A to office B.

You need to get to your base every day at your own expense. Once you are there your employer should pay to get you to wherever they actually want you to be.

HappyMJ

elounda wrote: »

Just doing the figures here but if you are getting 45p a mile for 46 mile round trip that's just under £21.00 unless you are driving a gas guzzler then 140 mile journey would not cost you that much so you are not really out of pocket are you?

The reimbursement rate is set by HMRC at 45p. It's not just for petrol it's also to cover any other expense to do with the vehicle. Tyres wear out, brake pads wear out, the car requires servicing more often, the car depreciates more with more miles on it...etc...

45p/mile doesn't cover the cost of me having a car for 1 journey per week. I lose money owning a car for work purposes....so I don't.

I would in this case take the train and charge the company the full cost of the train fare.