Overpaid Mileage Rate - Company Chasing Payment

Savvy_Sue

The company should not have made this mistake, BUT it is your responsibility to check what you're being paid, and I'm surprised the OP didn't notice that they were being paid 3-4 times as much for mileage as they should have been.

You submit the mileage claimed, let's say 100 miles. 100 x 12p = £12. 100 x 45p = £45. Not exactly a small difference. 

Undervalued

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.

I'm sorry but you haven't done everything correctly. It is as much your responsibility as it is the firm's to check that your salary and other payments are correct.

Legally they are entitled to recover any overpayment, even if it is entirely their fault. The best you can hope for is that they agree to do so over a period of time, as a gesture of goodwill, although there is no legal right to "easy payment terms".

penners324

After this is paid back you can claim tax on the difference between 12p and 45p per mile. This is done through HMRC

Exodi

I think the OP is just as culpable as the employer.

At my workplace, we have employer owned vehicles and employee owned vehicles.

We are all clear that fuel is reimbursed at the Advisory Fuel Rate for employer owned vehicles (in the OP's situation, 12p for a <1600cc diesel) https://www.gov.uk/guidance/advisory-fuel-rates. As far as I understand, the AFR was designed to simplify fuel accounting by reflecting the average price of fuel, updated each month.

And 45p for employee owned vehicles (https://www.gov.uk/government/publications/rates-and-allowances-travel-mileage-and-fuel-allowances/travel-mileage-and-fuel-rates-and-allowances).

I was always under the belief (and the more knowledgeable may correct me on this if I'm wrong) that the reason employee owned vehicles were reimbursed much higher then the AFR (aka the rough cost of the fuel), was because the amount was also intended to compensate the depreciation/wear and tear of the employees personal vehicle, and possibly also the increased insurance cost.

It's obviously not right for an employer to reimburse an employee 3-4x the cost of the actual fuel for the employers own vehicle.

DigSunPap said:

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

Unfortunately, while this emotional argument may make you feel better, it is not seated in reality.

We are all human and humans make mistakes. Overpayments happen frequently on these forums, and while an employee may dream like you of being able to say 'not my problem' and keeping the overpayment, they soon meet reality having to settle it one way or another, or find it deducted from their final pay with a less than ideal reference as a parting gift.

But don't get me wrong, the employer may feel bad and extend courtesies in recovering the overpayment - for example, by deducting a smaller amount from the employees wages every month instead of a big lump sum if it would put them in hardship, but it is repayable nonetheless.

He that is without sin among you, let him first cast a stone. I also don't see it is as 100% the employers fault, the employee should have also noticed - as otherwise the OP could have generated an absolute fortune by just taking their company car in donuts round the M25 all day long, considering they were being reimbursed 3-4x the cost of the fuel they were putting in their company car. It must have crossed the OP's mind at some point that they pay for a tank of fuel (using my wifes car as an example), £50 for 30 litres of diesel, at 50MPG you get about 330 miles... so for every £50 tank of fuel bought, reimbursement would be ~£150.

I know it sucks for you now @loz2023 as you had this dropped in your lap unexpectedly but in reality, you should look at it the other way round, that you have been fortunate to have had the benefit for £500 for 3 years that you should never have had. I certainly wouldn't be causing any big drama over something clear cut like this, but you will occasionally find 'principle-warriors' on this forum, that delight in offering knee-jerk emotional responses that will almost certainly prove detrimental long term.