Company Car - Private Mileage / Fuel

Hag83

Hi All
I've just recently accepted a sales role which includes a company car. My week will be split between being on the road and at the office which is a 100 mile round journey. I understand that my commute will be classed as private mileage. How will my new employer charge me for private mileage ? I'm aware of the fuel BIK tax but I'm getting worried I'm going to get lumped with a cost per mile which will be pretty significant in total due to the commute. Any advice much appreciated 

On-the-coast

What do you mean by “charge you?”
normally with a company car used for the commute part of the job you just pay for the fuel yourself…

For the parts where you’re on the road as part of the job you’ll either use an expense card or claim a mileage allowance. 

But ask the new company. 

Hag83

On-the-coast said:

What do you mean by “charge you?”
normally with a company car used for the commute part of the job you just pay for the fuel yourself…

For the parts where you’re on the road as part of the job you’ll either use an expense card or claim a mileage allowance. 

But ask the new company. 

I've asked them but nothing back yet. 

I've never had a company car so new to all of this.

By charge I mean the company charging me for my personal mileage. 

Hoenir

You'll need to see your new Employer's Company Car Policy as to how and what they recover for private mileage. 

moneytorques

If you have to "start" your day at a site instead of the office, then Id suggest that part of your journey could be business mileage. 

Nearlyold

Company I worked for supplied the car and offered two options re fuel costs.

1) The employee bought all the fuel then claimed a mileage allowance from the employer for each business mile travelled @ a fixed rate per mile.

2)The employer paid for all the fuel  via a fuel card and charged the employee the same  fixed rate as option 1 for all non business miles.

Mildly_Miffed

Where will your normal "place of work" be? Will you be home-based, or officially office-based?

If you visit the office once a week, and are on the road four days, there's an argument to say that your normal base is home. Ergo, any mileage to the office is not commuting but a business trip.

Rough rule of thumb: if you have a day when your meetings are cancelled at the last minute, and you catch up on paperwork instead, do you do so from home or do you do the 200 mile round trip to the office?

But that's one for the employment side, not here.

Either you pay for your personal miles, or you pay the personal-fuel BIK.

Exodi

Speak with your employer to confirm their preference but it's usually two methods:

Company pays for all fuel (e.g. you fill the car up using a fuel card and/or company credit card). You then submit a report with the receipts weekly/monthly detailing the business and private miles, and then the company charges you for the private miles.

Or

You pay for all fuel and then then submit a report weekly/monthly detailing the business and private miles, and then the company reimburses you for the business miles.

Usually this is done at the Advisory Fuel Rate, which publishes it's rates every month, but other rates can be used (but can be challenged, hence why many opt to just use the AFR): https://www.gov.uk/guidance/advisory-fuel-rates

So for example, assuming you pay for all the fuel (this is the system I now have with my employer), I would submit an expense report at the start of each month that would essentially look like this:

Opening mileage: 10000
Closing mileage: 11000
Personal mileage: 300
Business mileage: 700

Total: 700 x 0.13 = £91.00 (using a 1.8L diesel car for this example). I'd then be manually refunded £91 (so tax not deducted on it).

I would recommend that you make notes somewhere of the journeys that you are claiming for. E.g. I have a separate tab that shows all the journeys that total up to 700 in this month (for example), not only does it help should an employer ever say "700 seems like a lot?" but it's also useful should you have any shenanigans with HMRC in the future.

Hag83 said:

I'm aware of the fuel BIK tax but I'm getting worried I'm going to get lumped with a cost per mile which will be pretty significant in total due to the commute. Any advice much appreciated 

I think you're confused. Fuel benefit tax only applies where the employer offers to pay for all of your fuel (including for personal use). You would need to pay tax on this fuel benefit in this case.

In reality you'll be probably be paying 13-14p per mile (though it depends on your car), which whenever I've calculated it seems about right.

Hag83

Thanks for the advice everybody. I've spoken to the company and everything is sorted now. 

Arunmor

Hag83 said:

Thanks for the advice everybody. I've spoken to the company and everything is sorted now. 

What did you agree to?