Mileage allowance still £0.45 P/M. Why?????

grillphil

Something has really got my goat for a while now.


I've been claiming business mileage for over 20 years now at the HMRC rate of £0.45 per mile and wanted to know (if anyone does) why the amount hasn't changed for decades & inline with inflation.


I've asked my accountant & the reply was "it's what HMRC sets and allows" That's it!!! As much use as a chocolate teapot!!


I think it's about time the rate was reviewed as it's outdated and doesn't reflect the "real" costs of fuel, road tax, insurance, servicing costs etc we have to pay these days out of our own packets.


In my opinion, this is something that has been over looked and we all need to start shouting about it.


Rant over

DoaM

45p per mile? You're obviously using your own car.

If you have a funded vehicle (i.e. company car on which you pay BIK tax) then you only get maybe 11p per mile.

AdrianC

grillphil wrote: »

I've asked my accountant & the reply was "it's what HMRC sets and allows" That's it!!! As much use as a chocolate teapot!!

You may not like the answer, but it is absolutely accurate.
Your employer can pay more, if they choose - but you would be taxed on the amount above that limit as income.

Oh, and don't forget it's only 45p for the first 10k miles. It's 25p above that.

https://www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax


By the way, your memory is out.

It went up from 40p in the 2011 budget.
20 years ago, it was an average of the four engine size bands of 40p for the first 4k miles, 22.5p thereafter.


Ah, here y'go. Went up to 40p/10k then 25p in the 2002 budget.
https://www.gov.uk/government/publications/rates-and-allowances-travel-mileage-and-fuel-allowances/travel-mileage-and-fuel-rates-and-allowances#approved-mileage-rates-from-tax-year-2011-to-2012-to-present-date

neilmcl

grillphil wrote: »

Something has really got my goat for a while now.


I've been claiming business mileage for over 20 years now at the HMRC rate of £0.45 per mile and wanted to know (if anyone does) why the amount hasn't changed for decades & inline with inflation.

Well you're wrong for a starters. it's only been £0.45 (for the 1st 10,000 miles) since the 2011/12 tax year, it was £0.40 before that.

Tom99

[FONT=Verdana, sans-serif]Back in 1980, 38 years ago, my employer paid 70p per mile if your car was over 2,000cc and Volvo's were just over 2000cc funnily enough. I am sure I never paid any tax on that.[/FONT]

grillphil

My memory is probably out (old age you know!) and yes, it's my own car used for business as well. I know about the 10k miles threshold too.


So why hasn't this been reviewed again for years, that's my point.


Everything has gone up with inflation but this seems to be left in the dark by the government. Crafty I think!

BoGoF

Are you employed or self-employed?

foxy-stoat

What car have you got and whats your annual business mileage and personal including commute mileage ?

If you already have a car then you have to insure/tax/mot/service it anyway - you may pay a little extra for business use and if your business miles (excluding commuting) are high then you will spend more on brakes/tyres etc.
If you drive 15,000 miles a year total and your in a car that achieves 45mpg then;
Your £40 MOT would cost you £0.0027/mile
Your £400 insurance would cost you £0.0267/mile
Your £500 service plus £500 extra for tyres/brakes would cost you £0.0667/mile
Your £2000 a year fuel bill costs you £0.1333 a mile

Forgetting about depreciation, total cost of running the car is £0.2294 per mile.

Total cost would be £3440 a year - if you drive 7600 business miles then you effectively pay practically zero for the cost of running the car for personal and business miles - assuming you do not get a £5000 a year car allowance on top of the 45p per mile.

I think the 45p is more than reasonable.

AdrianC

grillphil wrote: »

So why hasn't this been reviewed again for years, that's my point.

Anybody would think they were trying to dissuade unnecessary "business" use of cars, and move people to public transport or online meetings...

peachyprice

BoGoF wrote: »

Are you employed or self-employed?

Ah, realised your mistake?

foxy-stoat

Come onnnnn, Phil.....you got 12 large last year from your PPI refund and your complaining about the fact that the generous mileage allowance hasn't been reviewed since 2012?