Business Mileage Allowance with Company Fuel Card

Albermarle

robcol1305 said:

Thank you all for your input.  Much appreciated.  I have compared the following two scenarios - (a) I pay for the fuel and (b) the company pays for the fuel via the fuel card.  Lets imagine my total fuel cost was £100 and I did 750 miles in total - 250 business miles and 500 personal.

In scenario (a) I would claim 250 miles at 20p via company expenses = £50.  I could then apply for the mileage allowance (250 business miles x 25p (45p - 20p)) which is a £62.50 claim. At 20% basic tax it would be a £12.50 rebate. Therefore, I've paid out £100, reclaimed £50 in exps and received a £12.50 rebate so overall it's cost me £37.50.

If I now consider a company fuel card (b), the company pay the £100 fuel cost, they calculate business miles = £50 (250 x 0.20p) and so charge me the balance for private miles = £50. If I then claim the mileage allowance in the same manner, again I would get £12.50 rebate. Therefore, my company have charged me £50 and I have reclaimed £12.50 so overall, I have spent £37.50. 

In both scenarios, it has cost me the same for private miles so I feel justified to process the claim.
Thanks again everyone. 

The only other point is, how much is the actual fuel cost per mile? If it is less than 20p then you could be better off buying your own fuel, especially as you can shop around for cheap prices.

Bookworm105

Albermarle said:

robcol1305 said:

Thank you all for your input.  Much appreciated.  I have compared the following two scenarios - (a) I pay for the fuel and (b) the company pays for the fuel via the fuel card.  Lets imagine my total fuel cost was £100 and I did 750 miles in total - 250 business miles and 500 personal.

In scenario (a) I would claim 250 miles at 20p via company expenses = £50.  I could then apply for the mileage allowance (250 business miles x 25p (45p - 20p)) which is a £62.50 claim. At 20% basic tax it would be a £12.50 rebate. Therefore, I've paid out £100, reclaimed £50 in exps and received a £12.50 rebate so overall it's cost me £37.50.

If I now consider a company fuel card (b), the company pay the £100 fuel cost, they calculate business miles = £50 (250 x 0.20p) and so charge me the balance for private miles = £50. If I then claim the mileage allowance in the same manner, again I would get £12.50 rebate. Therefore, my company have charged me £50 and I have reclaimed £12.50 so overall, I have spent £37.50. 

In both scenarios, it has cost me the same for private miles so I feel justified to process the claim.
Thanks again everyone. 

The only other point is, how much is the actual fuel cost per mile? If it is less than 20p then you could be better off buying your own fuel, especially as you can shop around for cheap prices.

You misunderstand. He buys fuel at whatever pump price it is, whether he pays for it with a company card or his personal card is irrelevant, as is his fuel economy (cost per mile). 
Your mistake is confusing how the company treats private usage. They do not charge that at 20ppm, they charge whatever is the remaining balance on the card after deducting business use. Therefore, he will always incur the same cost for private use whether he does, or does not, use a fuel card. 

Suppose fuel actually costs him 10ppm.

With fuel card and 20ppm business use
He does 750 miles at cost 10ppm  = £75 charged to fuel card (250 business x10) + (500 personal x 10). 
The company repays 250 bus miles @ 20p = £50 
He has spent total £75 on the card which has been paid by the company, so the company deducts the balance of £25 (75-50) from his pay so it incurs only the business use cost.
He reclaims the 5ppm (*) tax relief total 12.50 (250 x 0.05)
Net cost to him for 750 total miles driven @ 10ppm fuel cost = £25 pay deduction less tax refund 12.50 = £12.50 

Without fuel card, but with 20ppm company expenses
He does 750 miles at cost 10ppm  = £75 spent on fuel (250 business x10) + (500 personal x 10). 
The company repays 250 bus miles @ 20p = £50 
He reclaims the 5ppm (*) tax relief total 12.50 (250 x 0.05)
Net cost to him for 750 total miles driven @ 10ppm fuel cost = £75 personal expenditure - 50 expense claim -12.50 tax refund = £12.50

Without ANY expenses from company 
He does 750 miles at cost 10ppm  = £75 spent on fuel (250 business x10) + (500 personal x 10). 
He claims 250 bus miles at 45ppm so submits tax claim £112.50 and gets 20% tax relief worth £22.50 in money terms.
Net cost to him for driving 750 miles is 75 - 22.50 = £52.50

With fuel card and with company expenses paid at 45ppm
He does 750 miles at cost 10ppm  = £75 charged to fuel card (250 business x10) + (500 personal x 10). 
The company repays 250 bus miles @ 45p = £112.50 
He has spent total £75 on the card which has been paid by the company, but is entitled to receive 112.50 for business use of personal car, so the company owes him £37.50 (75-112.50) 
Net cost to him for 750 total miles driven @ 10ppm fuel cost = £75 spent on card less112.50 expense claim  = £37.50 payable to him (tax free) 

Without fuel card, but with company expenses paid at 45ppm
He does 750 miles at cost 10ppm  = £75 spent on fuel (250 business x10) + (500 personal x 10). 
The company repays 250 bus miles @ 45p = £112.50 
Net cost to him for 750 total miles driven @ 10ppm fuel cost = £75 personal expenditure - 112.50 expense claim = £37.50 payable to him (tax free) 

* Note HMRC 45ppm rate offset by company 20ppm rate is the equivalent of 5ppm in cash to a basic rate tax payer (45-20) x 20% tax = 5