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

uknick

Does it really cost 45p a mile for your car? My Porsche, over 9 years and 78k miles, cost 51p without depreciation, 86p with. And, that cost includes full service history and official extended warranties over that time. By coincidence, it cost 45p without the warranties and depreciation.

Yes, I am a little OCD about recording all my car running costs

grillphil

I'm employed by the Limited company I own.


Average private mileage = 1650m
Average business mileage = 9900m


Vehicle type = Land Rover Discovery 3


Average mpg (diesel) = 23mpg


Road Tax = £555
Insurance (inc business use) = £410
Servicing per year = £1800
Fuel = Lots!!


As you can see, quite expensive per year & I know some of you will say "change your vehicle"


This is very practical for my business & family & I cannot find anything on the market which will provide the load capacity of the LR3 other than a van (not white!!)


A dilemma as you can see.

BoGoF

9900 business miles gives you £4455 to cover these costs. And has been said, as its your personal car you would be paying VED, insurance and servicing costs anyway.

AdrianC

grillphil wrote: »

Average private mileage = 1650m
Average business mileage = 9900m

Annual?

Vehicle type = Land Rover Discovery 3
Average mpg (diesel) = 23mpg

Mmmm...

Road Tax = £555
Insurance (inc business use) = £410
Servicing per year = £1800

£2,765/yr = 24p/mile

BTW, £1,800/yr servicing for <12k? You're either being taken for an utter mug, or you have an absolute shed.

Fuel = Lots!!

23mpg at £1.30/litre = 25.4p/mile

So that's 49.4p/mile, only a snidge over the mileage payment, and that's with a massively unusually thirsty vehicle that seems to need vast applications of spanner time at regular intervals.

As you can see, quite expensive per year & I know some of you will say "change your vehicle"

This is very practical for my business & family & I cannot find anything on the market which will provide the load capacity of the LR3 other than a van (not white!!)

Then you'll accept that paying <5p/mile out of your own pocket towards your business mileage is a small price to pay for your very limited family transport needs being met at absolutely minimal cost to you.

Your personal mileage is costing you a bit over £800/year. The 4.4p overage on the business mileage is costing you another £440. ~£1,250 per year to cover all your personal transport needs.


If you were to have the D3 for personal use only, then the cost after VED would be less than £700. I doubt the insurance would reduce much without business use, but let's say £300, and assume the service costs halved - so running the car for business use is actually £500 cheaper in your pocket than having it just for your personal use would be.


You could pay yourself a bit over the 45p, and pay income tax on it, if you wanted - but since it's your company, it's all out the same pot anyway. It'll be cheaper to take it as dividend.

It may well be cheaper to pay yourself less than 45p and take that as dividend instead, but that's one for your accountant to run.

A dilemma as you can see.

First world problem.

grillphil

Thanks everyone.


I think my 23mpg is a little excessive, more like 20 with todays traffic conditions.


And yes, small repair costs do cost a fortune even using my indies & not main stealers. Even yesterday, a gearbox oil leak where an £8 seal failed cost me £544 to have fixed.

AdrianC

Short version: you are choosing to run a large, heavy, inefficient, thirsty, ageing (2004-9) vehicle - and complaining about the maintenance and fuel costs...


Yet you are _only_ just outside the mileage rates.

But, of course, that ignores the largest cost for anybody running a more efficient new vehicle. Depreciation (effectively zero for you).

grillphil

AdrianC wrote: »

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

It does seem like that.

grillphil

AdrianC wrote: »

Short version: you are choosing to run a large, heavy, inefficient, thirsty, ageing (2004-9) vehicle - and complaining about the maintenance and fuel costs...


Yet you are _only_ just outside the mileage rates.

But, of course, that ignores the largest cost for anybody running a more efficient new vehicle. Depreciation (effectively zero for you).

This is right.


Until technology is right, motoring will always be expensive. I'll wait for a Tesla with good load capacity, then see if it'll get me the 400 miles to Scotland without stopping for a recharge.

foxy-stoat

I dont think the 45p allowance is the problem.

If you own the limited company then pay yourself a car allowance of £5000 or get your company to pay for the servicing - that should even things up....or get your Limited company to lease you a new LR, it would be far more tax efficient than running an older one.

Speak to your account for your best options.

AdrianC

BiK on a new D5, though, will be the showstopper...

The very cheapest is 37% of £47k list price - at 40% tax, that's north of £6k straight off. More than the OP's paying in total currently!