Mileage rate - 45p. Will it change?

CornishJon

Hi - Does anyone know if there's any plans to increase the mileage rate from 45p per mile for causal users?

Grumpy_chap

I would consider it very unlikely

daveyjp

45p barely reflected the cost of running a private vehicle 10 years ago.  Despite ever increasing costs it hasn't increased so I don't expect an uplift anytime soon.

Budget is 23 March and that is when any announcement would be made.

Beduffshirl

Seems the answer was no - this is ridiculous

wolvoman

Beduffshirl said:

Seems the answer was no - this is ridiculous

45ppm is only the tax-free amount up to 10k miles. Your employer can pay more if you ask.

Grumpy_chap

Beduffshirl said:

Seems the answer was no - this is ridiculous

Why is it ridiculous?  I can run a car in total for less than 45 pence per mile for 10k miles per year, so this is a nice tax-free profit that is available

daveyjp

Grumpy_chap said:

Beduffshirl said:

Seems the answer was no - this is ridiculous

Why is it ridiculous?  I can run a car in total for less than 45 pence per mile for 10k miles per year, so this is a nice tax-free profit that is available

Can you show your maths in that calculation?

DE_612183

I can get 450 miles out of my car, 450 x 0.45 = £202.50

It costs £82 to fill up my tank.

That doesn't include wear and tear but that's hard to factor in.

Grumpy_chap

daveyjp said:

Can you show your maths in that calculation?

Gladly:

• Car purchased 2016, £2k.  Depreciation <£400 per year.
• Insurance £165
• Maintenance £1k
• VED £220
• 40 mpg.  10k miles = 250 gallons.  £9 per gallon.  £2,250
• Total £4,035
• 40 pence per mile.

DrEskimo

Grumpy_chap said:

daveyjp said:

Can you show your maths in that calculation?

Gladly:

• Car purchased 2016, £2k.  Depreciation <£400 per year.
• Insurance £165
• Maintenance £1k
• VED £220
• 40 mpg.  10k miles = 250 gallons.  £9 per gallon.  £2,250
• Total £4,035
• 40 pence per mile.

Interesting....Thought I would do the same for my used EV using averaged costs over the last 40months:

• Car purchased 2019, £14,500. Current value £13,000: Depreciation £450/year
• Insurance £250
• Maintenance £450 (including warranty extension)
• VED £0
• 3.8mi/kWh. 10k = ~2,895kWh (assuming 10% charging loss). 90% at home (£0.05/kWh), 10% at public (£0.49/kWh) = £270
• Total = £1,420
• 14p/mile

Grumpy_chap

DrEskimo said:

• Car purchased 2019, £14,500. Current value £13,000: Depreciation £450/year

Your figures overall were very interesting. 

I do wonder how valid it is to consider on-going extremely low depreciation, for both ICE and EV cars?

It really is not long ago that cars couldn't be given away.  From memory, threads on here included ex-demo / pre-reg Astra for £11k (March 2021), Scala lease at £4k for two years (July 2021) and I was offered a whopping discount on an ES (Sept 2021).

Today, discounts are impossible and the wait is a year or more.

I would like to think that car manufacturers have competent management so they will be developing production plans on the basis that Covid and Ukraine war are "baked in" realities that they need to manage supply-chain, manufacturing and logistics to consider as part of their business need.  This will allow production to recover to normal levels.

If that recovery in supply capacity coincides with a tightening of spending because of the cost of living pressures (which do seem to be impacting globally), then the risk is a perfect storm moving from over-demand to over-supply.  That would result in offers to shift new cars and then used cars have to depreciate also.

Just a thought.