Overpaid Mileage Rate - Company Chasing Payment

loz2023

Hi all,

Hoping for some advice on an overpayment of mileage rate when claiming expenses.  I've had a salary sacrifice car since 2020 which I use for personal and business mileage. 

The company has 2 schemes for claiming mileage:

'authorised user' which is anyone who uses their own personal vehicle for business use
'salary sacrifice' which is anyone who has a salary sacrifice / company vehicle that they use for business use

Drivers have to register their vehicle on the correct scheme to claim mileage.  This is a form sent to the relevant department who then input the vehicle details and scheme on the HR portal so that mileage claims can be submitted.

I've been claiming mileage over the last 3 years in the portal which is approved by a manager before being paid.  Today I received a letter from the HR department stating that they have been paying me 45p per mile, when it should've been 12p.  They are now looking to recover the overpayment of around £500.

I've had a look back at the paperwork I submitted when I registered the vehicle for business use, and it clearly states that it's a salary sacrifice vehicle.  When I check back on my mileage claim forms on the HR portal, the scheme is blank.  Clearly my vehicle has been registered incorrectly and hence why I've been getting paid the wrong mileage rate.

Where do I stand with this?  I've done everything correctly at my end and this is obviously human error to whoever input the details to the HR portal.  It's also taken 3 years for them to discover this.  Any advice would be appreciated.

YBR

I'd guess that it will be hard to persuade them that if it's down to their error, they should take the financial hit.

If it were me I'd focus on arranging to pay it back over a similarly long period (bearing in mind that all outstanding balance will need to be paid if you leave).

If they're feeling generous and there is no way you could have known, it's possible that you could get the amount reduced, but fighting too hard might break the relationship with your employer.

MorningcoffeeIV

How are they asking you to repay it?

If a straight deduction from your next payslip would be difficult, then you could ask for a more generous repayment plan. 

But don't delay repayment unnecessarily, as it could impact your position negatively.

Devongardener

I think I’d try negotiating to see if the employer would meet you halfway way and absorb some of the hit as it was their error.  They should certainly offer an extended repayment period.     

is there anything in your contract that states they will recover overpayments?

MattMattMattUK

I suspect that they will not be willing to reduce the amount because then that reduction would become taxable as the original payments were tax exempt, due to that complication I expect them to recover the whole amount. 

If you are not in a position to clear it then negotiate a staggered repayment, but be reasonable, there is no point in risking souring your relationship with your employer. 

bluelad1927

Is the amount  overpaid £500 or is that what they are looking to get back.

A couple of decades ago. I had a series of pay rises close together one of which was too much. A few yrs later it came to light and over time it amounted to nearly £3000. They said they were obliged to recover £500 and put me on a payment plan. If your circumstances turns out to be  similar then I'd go with the repayment 

TELLIT01

The OP will presumably have been taxed on that overpayment so it's important to check how the tax and NI will be refunded.

MattMattMattUK

TELLIT01 said:

The OP will presumably have been taxed on that overpayment so it's important to check how the tax and NI will be refunded.

I am making the presumption and I could well be wrong, that as it was originally processed as standard 45p per mile expenses no income tax or NI has been charged. The current situation means that tax and NI would be due on that amount, but only if not repaid to the company in full. There is also the issue with it being split across multiple previous as well as the current tax year. From the employer's perspective anything less than complete repayment of the overpayment us going to be messy. Whilst it does appear to be the employer's error I do not think that means it should mean that the employee gets to keep the money and attempting to do so may have serious repercussions for their employment. 

loz2023

Thanks for everyone's responses.  The total I'm due back to them is around £500 and that's what they're looking to deduct from my pay.  I hadn't considered the tax and NI to begin with, so that's good to know.

I'll have a chat with the HR team next week and see if it can be repaid over a longer timespan.  I have a great job, and have no intention of ruining my reputation over the sake of £500, so hopefully an agreement can be made.  It was just a bit of a shock seeing the letter earlier and I was keen to gain the advice / opinions from others.

Let's hope my weekend improves after this!!  Thanks again everyone.

General_Grant

loz2023 said:

Hi all,

Hoping for some advice on an overpayment of mileage rate when claiming expenses.  I've had a salary sacrifice car since 2020 which I use for personal and business mileage. 

The company has 2 schemes for claiming mileage:

'authorised user' which is anyone who uses their own personal vehicle for business use
'salary sacrifice' which is anyone who has a salary sacrifice / company vehicle that they use for business use

Drivers have to register their vehicle on the correct scheme to claim mileage.  This is a form sent to the relevant department who then input the vehicle details and scheme on the HR portal so that mileage claims can be submitted.

I've been claiming mileage over the last 3 years in the portal which is approved by a manager before being paid.  Today I received a letter from the HR department stating that they have been paying me 45p per mile, when it should've been 12p.  They are now looking to recover the overpayment of around £500.

I've had a look back at the paperwork I submitted when I registered the vehicle for business use, and it clearly states that it's a salary sacrifice vehicle.  When I check back on my mileage claim forms on the HR portal, the scheme is blank.  Clearly my vehicle has been registered incorrectly and hence why I've been getting paid the wrong mileage rate.

Where do I stand with this?  I've done everything correctly at my end and this is obviously human error to whoever input the details to the HR portal.  It's also taken 3 years for them to discover this.  Any advice would be appreciated.

During those three years did you never check how the vehicle was registered and why the higher mileage rate was being used for your claim?

DigSunPap

At the end of the day it is the company's fault if they have overpaid you. It is not your responsibility to resolve their mistake. Check the details of your contract