Tax relief for company car use for casual work

usedtobefaster

I’m employed under PAYE with employer A and have a company car through this employment.  I have picked up some casual work with employer B (the activities between employer A and B are completely unrelated) and not PAYE where I have to invoice for hours worked and as part of the invoices I can claim 45p/mi. and I’ve been using my company, and only, car to travel to the work location.  I understand in my self assessment tax return I’ll need to declare the whole amount as income and claim tax relief for the mileage, now my query is what mileage rate is correct for the tax relief ?

I know that using a company car for company business is 4p/mi and for a personal car it’s 45p/mi , but my position isn’t covered with these as it’s another a personal car but the work isn’t for the business that supplies the car.

hoping someone has some knowledge and experience in this situation and can offer the needed advice.

tasticz

IMO, it  should be 45p/mile as company B did not provide you with a car (effectively you’re using your own car - treat car as private car as company A is unrelated to company B ) but I am not sure your employer A would be happy about you using the vehicle and it is probably stated in your contract docs that you shouldn’t.

If you have any hiccups expect to pay out of your own pocket or lie to company A.

Albermarle

I would be worried that the company car insurance would not cover it being used for work for another company.

[Deleted User]

Probably outside the box but the approved mileage rates are supposed to cover fuel, running costs and wear and tear on the car (which is why the rate drops after 10000 miles). One would imagine that the company A is also claiming the latter two costs.

I also would agree if the other posters regarding insurance and the agreement of the company who actually owns the car.

Pennywise

Apart from the insurance & employer A permission, I'd say the 45p rate is claimable.  OP may  not be paying the costs of the car, but they will be suffering the benefit in kind tax on it, so they are "paying" for it in a way.

This is based on a thread on here a few years ago where a disabled person had a motability car provided (so no cost to her other than fuel) and there was quite a debate as to whether she could claim the 45p given her only cost was the fuel, but at the time, several experienced/qualified accountants/tax advisers seemed to agree there was nothing stopping her using the 45p rate on two grounds, one being that there was nothing in statute saying you had to incur the costs of buying/running a car you were claiming mileage for, and secondly, she did "pay" for the car by virtue of giving up her DLA benefits in exchange for the car.

I'd say that giving up DLA (i.e. loss of income) in exchange for a motability car is very similar to suffering BIK tax to have access to a company car.

p00hsticks

usedtobefaster said:

 I’ve been using my company, and only, car to travel to the work location. 

So you are using the car just to commute to the second work location ? Not to actually carry out the work for Company B ?

My understanding is that you can't claim for the cost of getting you to and from your usual (contracted) place of work...

Albermarle

Pennywise said:

Apart from the insurance & employer A permission, I'd say the 45p rate is claimable.  OP may  not be paying the costs of the car, but they will be suffering the benefit in kind tax on it, so they are "paying" for it in a way.

This is based on a thread on here a few years ago where a disabled person had a motability car provided (so no cost to her other than fuel) and there was quite a debate as to whether she could claim the 45p given her only cost was the fuel, but at the time, several experienced/qualified accountants/tax advisers seemed to agree there was nothing stopping her using the 45p rate on two grounds, one being that there was nothing in statute saying you had to incur the costs of buying/running a car you were claiming mileage for, and secondly, she did "pay" for the car by virtue of giving up her DLA benefits in exchange for the car.

I'd say that giving up DLA (i.e. loss of income) in exchange for a motability car is very similar to suffering BIK tax to have access to a company car.

Also in this Motability case, you have the option of not having a Motability car , by keep receiving the DLA benefits and buying your own car and running it . In which case you would have no problems to claim mileage allowance for using it in your employment.

I used to have a company car and whatever the rights and wrongs, I know my employer would have taken a very dim view of me using it for anything other than company business and personal use. 

sheramber

You cannot claim tax relief for commuting to and from the work place. Being self employed does not change that.

Grumpy_chap

I agree with others, from the tax point of view:

1. The car is provided by employer A and the OP suffers the respective BIK tax on that benefit.  Indirectly, the OP has also paid for the car through a lower salary insofar as a competitor may offer higher salary but no car versus company A offering a car but a it less salary - the overall value of the salary package is likely comparable.

2. The OP then uses this car as though it is their own private car for employer B, who likely does not care who owns the car (but will likely ask to see evidence of documents including insurance covering the business use).  Employer B can then pay the OP at the standard 45 pence / 25 pence per mile AMAP rates.

Also, as others pointed out, the complexity is whether the OP is allowed by company A to use the car for the business of another company.

On-the-coast

I’m WFH today, and my other half has driven to work in my company car…
tomorrow I shall drive to work, but I’ll probably do that in our other non-company car, as  my place of work is closer, so it makes sense to do it that way. 

However, my partner is commuting to a place of work.  If there was business mileage (irrespective of claims) I’d be checking my company’s insurance policy carefully.  

usedtobefaster

Thanks for all the useful comments and information , a lot to consider.

The conversation about permissions and insurance is something I had recently considered.  This casual work is now over, but it involved sports coaching for a charity and I'm involved in this through my pass time and voluntary coaching positions, so I don't know is this changes the conversation around insurance (SDP) it could be argued it's for pleasure as I'm not doing it for the income that's a useful addition.