Claiming Business Mileage

MarcusTheCat

My employer reimburses employees who drive their own cars whilst travelling for work. Currently they pay 45p per mile up to 10,000 miles per year then 25p per mile thereafter in line with HMRC guidelines. Starting in the new financial year they will only pay 25p per mile regardless of yearly total and say that the 20p per mile difference for the first 10,000 miles can be claimed back from HMRC using form P87. Having looked into it it appears that HMRC will only pay tax relief on the difference which is 4/8/9p per mile depending on income tax bracket, i.e. 20/40/45%. Can anyone whose employers operate a similar system please confirm if my understanding is correct? TYIA.

[Deleted User]

You are correct

Veteransaver

I'd be asking your employer to review their mileage, or demand they pay for a hire or company car if you are required to use it for business.
Don't forget you also need to have business insurance, so at 25p a mile you are probably subsidising your employer.

Dazed_and_C0nfused

MarcusTheCat said:

My employer reimburses employees who drive their own cars whilst travelling for work. Currently they pay 45p per mile up to 10,000 miles per year then 25p per mile thereafter in line with HMRC guidelines. Starting in the new financial year they will only pay 25p per mile regardless of yearly total and say that the 20p per mile difference for the first 10,000 miles can be claimed back from HMRC using form P87. Having looked into it it appears that HMRC will only pay tax relief on the difference which is 4/8/9p per mile depending on income tax bracket, i.e. 20/40/45%. Can anyone whose employers operate a similar system please confirm if my understanding is correct? TYIA.

A not uncommon ploy.

Whether it is deliberately implying something that is wrong or simply a lack of understanding is difficult to know but unless you are employed by HMRC they won't pay your mileage!

Some people who only work part of the year might get nothing back, it's not a fixed 20/40/45%, it depends on your total income.

gmje

Ask your employer to make a pool car available....you cant be doing high mileage at a loss

Albermarle

A very rough rule of thumb, is that the real cost of running a car is three times the cost of the fuel.
Even with a car with good mpg it will be costing 15P per mile for fuel, so.....

Probably in the past 45p a mile was quite generous, but with high fuel, insurance and repair costs ( especially since Covid) it is about right and 25P is unfairly low.
I would object to this change.