Business Mileage Conundrum

Realreal

Hello All,
I hope this is the right place to post this!
I am two weeks into a new job and was just about to submit my mileage expense claim when the boss threw in a weird curveball - requesting I deduct the commuter mileage distance from my overall journey mileage claim distances for every journey regardless of origin.
Saying that basically because my commute is 40 miles each way I have to deduct this off the overall journey length. From journeys originating and ending at the office AND those originating and ending at home.
I understand that if I do a journey from the office I count the office as the origin but not if I start the journey from home!?
So my boss is saying that I did a journey to a meeting in Kent from my home address. It was 140 miles total. I am being told I only claim for 60 of those miles as I have to deduct the 80 commute miles!?
I have NEVER done this before in my entire 20 year work history. Any journey for business purposes (apart from the daily commute) done in my own car - I have always claimed for the total mileage from home to location and back.
My new Boss is adamant that he is correct and I am wrong. He has suggested I look at the inland revenue site for confirmation.
I have looked around and all I can find is that mileage claims are applicable to any journey for business apart from the daily commute.
If he is right it means that I am going to be doing a load of mileage journeys under 80 miles that I wont be able to claim mileage for. This is going to be a huge loss for me!
Can anyone please shed some light on this, I am extremely confused!
Thanks

Pennywise

It's actually irrelevant what the HMRC rules are. The amount paid for travelling etc is a matter between you and your employer and should be covered in your contract of employment and/or employee manual.

If you're paid more than HMRC exempt, then you are liable to tax on the surplus. If you're paid less than HMRC exempt, then you can claim tax relief on the shortfall.

You'll find the HMRC manual helpful to help you decide what journeys are tax-exempt and which aren't. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/685996/490_0418_final.pdf. If you're doing a lot of travel in a particular area, it could well be than none of it is tax allowable if it falls within HMRC rules where a geographic area may be a permanent workplace hence no tax exempt travel at all.

Sections 3.48 and 3.49 may be helpful in that they clearly say that if you pass your employer's site (i.e. your usual permanent workplace), the entire journey is allowable, but if you stop off, only the excess is allowable for tax.

But, like I say, the HMRC rules don't dictate what your employer pays - that's entirely between employer/employee. It could be that you can claim tax relief on the difference between what HMRC rules apply and what your employer actually pays, if lower.

k3lvc

What does your contract say re place of work ?

If 'office' then I'd expect you to be claiming 'office' to 'meeting' with no commutable miles paid
If 'home' then claiming 'home' to 'meeting' and in addition the commutable miles on the days you're expected in the 'office'

NaughtiusMaximus

Is your new job in the public sector by any chance?

The system you describe is the norm in the public sector, the logic being that you applied for and accepted the job on the basis you'd be commuting X miles per day so only mileage over and above that can be claimed for.

25_Years_On

I'm confused. The boss says that you need to deduct the commuter milage from all journeys whether they originate from home or office, which would be silly. But you're not happy that the mileage is deducted from journeys originating and ending at home, which is sensible (and what I was used to in the public sector), but are happy if it's deducted from journeys originating and ending from the office which is not sensible and not typical and suggests incompentence somewhere.

Realreal

Thanks for your feedback - very helpful. The PDF clears it up somewhat and aligns with what I was thinking (assuming the boss meant that the companies qualifications for the definition of business travel match the definitions given by HMRC - which is what I believe he said!)

I am sorry for the confusion. What my feelings are is that there are 3 classifications of travel:

1. Private travel – travel for any other reason than for work purposes
2. Ordinary Commuting – travel between home and permanent place of work
3. Business Travel - Journeys which employees make to or from a place (temporary work place) they have to attend in the performance of their duties (travel to a place where attendance is in the performance of the duties) – but not journeys which are ordinary commuting or private travel.

It has always been my belief that number 1 and 2 are methods of travel that are not reimbursed by employer (upon pence per mile basis) but number 3 is.

The job is not public sector no.

The inland revenues stance seems to be that if a journey occurs that requires "passing work on the way to somewhere else" then the journey is split into 2 journeys IF the employee stops and substantive duties are performed. If the employee stops at work and performs considerable duties then part 1 of the journey (from home to office) becomes ordinary commuting and only the second part of the journey (from office to temporary work location) is applicable for relief.

If the journey passes work and a quick stop is made (to collect papers or whatnot) or a colleague is collected from the work car park to attend a meeting with you for example - then the entire journey is applicable for relief (from home to temporary work location and back)

If the journey does not pass work the entire journey is applicable for relief.

This is what I understood was true.

However, the boss seems to be saying that I need to split every journey into 2 parts - regardless of whether a stop at the office is made. And I need to deduct the length of the ordinary commute off the overall journey length and claim for the remainder. He says that this is what the Inland Revenue says (which I have now discovered is untrue) And overall seems totally bizarre to me.

There is no detail about this in the contract other than to state the amount which is payable per mile for business travel expenses using own vehicle.

So, without clear indication in the contract - where do I go for the definitive answer? Or is it a matter of arguing with the boss until a decision is made?

Thanks

25_Years_On

I don't think this an HMRC matter except in what is defined as business mileage from a tax point of view. It's a company policy matter on what expenses they will pay. I would have thought that it's not uncommon but my only experience is the public sector.

The question then is whether HMRC would allow you to include the mileage that the employer won't pay for in a tax relief claim and judging by booklet 490: Employee travel the answer is yes.

BoGoF

There is no definitive answer here. It all comes down to company policy. Your employercould choose to pay you 10p a mile, or 45p, or nothing. It has nothing to do with tax rules on travel.

redpete

I'd say it's not unusual to deduct the commute distance from a journey that starts or finishes at home. It is unusual to deduct the commute distance from journeys that start from and finish at anywhere else.

It is nonsense to say that a journey between your normal place of work and anywhere but home should have commute distance deducted for hmrc reasons - you have already made the commute journey with no company contribution so no tax liability.

Realreal

Just a bit of context on this - it is a new company and I am only the 2nd to join on a full time employed basis.

Still, its comforting to know to that I can claim tax relief on what the company doesn't pay up to 45p per mile for the first 10,000 miles.

BoGoF

Realreal wrote: »

Still, its comforting to know to that I can claim tax relief on what the company doesn't pay up to 45p per mile for the first 10,000 miles.

As long as you realise you will only get 20% or 40% of the amount your employer could have paid you, depending on your tax rate.