Question about claiming mileage allowance

Phargy

Hello,

I'm in full time employment and I use my own car for work. I get what seems a pretty standard 30p/mile which I claim monthly and get the rest back in tax relief at the end of the year, this is all fine I have no problems here.

The trouble comes with claiming the 30p/m from my employers, they insist that I send them fuel receipts covering at least 70% of my claim. I don't have the most economical car but I'm really struggling, I get further behind each month and now I'm going to have to burn my way through £150 of petrol just to get the receipts or not claim this month.

Question is, can they legally do this?

Alternatively can i refuse to claim the 30p/m and take the full amount in tax relief? (If I can stand to be out of pocket for that long)

Thanks for any help you can give me.

booksurr

hmm, this sounds confused

you can only claim the 30ppm expenses from the company if you have genuinely undertaken that number of miles on a business journey.

From a tax perspective how much fuel you use has nothing whatsoever to do with whether you are entitled to claim the tax relief on a mileage basis - either it is a business journey in your own private car or it isn't.

In terms of the company insisting you provide receipts that prove you have spend £x on fuel the obvious explanation is the rules around the company being able to claim VAT back on the mileage rate it pays you. To do that it must hold VAT receipts for at least the value of the VAT they wish to claim. The receipts do not in any way, shape, or form, have to be tied to individual business trips, they simply have to be VAT receipts for fuel in that VAT quarter. Some companies do claim that VAT, but many don't, because it is a trivial sum of money and the admin cost is high. Nonetheless, for those that do, they certainly must have the receipts so if that is what their policy says then either you abide by it or you don't - your choice.

I can only guess that the 70% threshold is something they have decided themselves to ensure they are "comfortable" with the level of paperwork they have to support a VAT claim. The rules do not specify anything about that at all 0- see sections 8.7 - 8.10

https://www.gov.uk/government/publications/vat-notice-70064-motoring-expenses/vat-notice-70064-motoring-expenses#scale-charges

cutting to the chase obviously 30ppm paid to you tax free by the employer is worth more to you in your pocket than only getting the tax relief on 45ppm, so complying with company expenses policy requirement would seem to be financially sensible?

as for legality - you have a contract of employment, they have conditions of employment and policies, so yes it is legal for them to make you follow their conditions

redpete

It might be worth pointing out to your employer that HMRC judge approx 10p / mile of a mileage amount to be attributable to fuel, so to reclaim VAT they should expect fuel receipts to cover this amount, not the 70% that your employer is looking for.

Can you collect and submit fuel receipts from colleagues who don't travel as much?

jennifernil

I would think there are no, or very few cars that use 30p per mile of fuel. Even our very heavy and thirsty Volvo XC90 when towing our 2000kg caravan only uses 25ppm!

What your employer pays you also should cover the cost of running the car........servicing, depreciation....etc

They are out of order if they expect you to document fuel costs of 30ppm.