Mortgage - Business Mileage

BenPS26

Hi,

I was wondering if anyone is able to help with the below / had a similar experience when seeking a mortgage.

I am currently looking to secure a mortgage. I have a basic salary but I also receive business mileage which is paid monthly at £0.45 per mile. As part of my role requires daily travel, I regularly receive between £200 - £400 a month on top of my basic salary. This has been consistent throughout the entirety of my employment (1+ years). I only use less than 50% of this for fuel.

My question is, are there any lenders that would include this during the affordability stage or even partly include? Has anyone else been in a similar situation when seeking a mortgage?

Thank you

El_Torro

The idea of car mileage payments is to pay for wear and tear on your car, not just fuel. I doubt mortgage lenders would put much stock on this when looking at affordability. 

Are you aware that you only get 45p a mile for the first 10,000 miles in a tax year? After that you only get 25p a mile.

Bear in mind that I'm no expert, there are actual mortgage advisors on this board who can hopefully give a more informed answer than me. 

kingstreet

None that I know of.

BenPS26

El_Torro said:

The idea of car mileage payments is to pay for wear and tear on your car, not just fuel. I doubt mortgage lenders would put much stock on this when looking at affordability. 

Are you aware that you only get 45p a mile for the first 10,000 miles in a tax year? After that you only get 25p a mile.

Bear in mind that I'm no expert, there are actual mortgage advisors on this board who can hopefully give a more informed answer than me. 

Thank you for your response.

Yes, I am aware that I’d only get the £0.45 rate for the first 10k miles. I fell within this based on my first year’s figures. I understand part of this payment may be intended for wear and tear on the car.

When asked for my outgoings would this suggest £0 for travel and car maintenance? Or could I use the additional business mileage and supply my actual figures for these etc?

MWT

BenPS26 said:

When asked for my outgoings would this suggest £0 for travel and car maintenance? Or could I use the additional business mileage and supply my actual figures for these etc?

No, the 45p/mile payment is set at a level which HMRC consider to fully cover the additional costs incurred due to business use, but not to generate a 'profit' which you could consider as earnings, as that would also mean they would be taxing you on that amount.

The excess that you do not feel is being used to cover actual expenses would mostly be compensating you for increased depreciation which is not something you would be declaring as an expense in a mortgage application so there is nothing additional you can add as income.

It is hard to imagine that you own this vehicle exclusively for business use with zero personal miles, so you will have costs associated with the vehicle... You do not need to include the direct costs for your business mileage in your declared expenses as they are covered by the reimbursement, but otherwise the costs of owning the car are real and should be disclosed if asked.

Generally, if your affordability is so tight that you need to try and get your mileage reimbursement into consideration, you may be stretching a little too far...  this sort of component is never guaranteed and is not in itself going to be factored into your affordability.

ACG

As far as I am aware none. Its not an income, you do not pay tax on it.