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Setting up Mileage Expenses
Yuzo
Posts: 111 Forumite
Hi.
I am looking into paying our staff mileage expenses. They all use their own personal cars. I don't know what to set the amount at though. I know we could cover the full 45p per mile. Would our staff be better off getting the full 45p from us? I am guessing they will get less when claiming the difference from the government?
I am looking into paying our staff mileage expenses. They all use their own personal cars. I don't know what to set the amount at though. I know we could cover the full 45p per mile. Would our staff be better off getting the full 45p from us? I am guessing they will get less when claiming the difference from the government?
Say we paid them 25p per mile and the government covered the remaining 20p ... would the government give them 20% of that 20p? but letting them claim more from the government would save us money as a business?
Also, they travel and work out of different stores. I know they cant claim on travel to and from work. We currently let them claim expenses on subsequent miles from their nearest store. Is this correct?
Also, they travel and work out of different stores. I know they cant claim on travel to and from work. We currently let them claim expenses on subsequent miles from their nearest store. Is this correct?
Thanks for any help.
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Comments
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Your staff will always be better off by receiving the full mileage from you, rather than tax relief on that mileage from HMRC. If they are basic rate taxpayers, they would receive 20% of the 20p in your example from HMRC. Remember that the tax free 45p a mile is only for the first 10,000 business miles, after which it is 25p a mile.
The question of what is commuting and what is business mileage is a difficult one. See:
https://taxaid.org.uk/guides/information/issues-for-employees/employee-expenses/travel-costs
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