Company Car Mileage Rates

Pint_of_Gem

Hello

I will shortly be getting a new company car and the company I work for have previously said they will pay me 10.5p per mile for business miles. This is based on a 1.5-litre diesel engined Renault Megane estate. Is this a fair rate?

Also, I know that the rates are somewhat determined by HMRC guidelines, but they never seem to change as the fuel prices do. On a quick check on the HMRC website it states 11p to be the current acceptable rate. Is the new HMRC rate a fair rate?

I am a little confused, because at the current time I use a fuel card and am charged 10p per mile for PRIVATE mileage out of my wages at the end of each month after filling in an appropriate form. When I get the new car the situation will be reversed - in that they will take the full fuel card charge from my wages, less the price of BUSINESS mileage as the current situation is apparently not ideal from a tax point of view......

Anyone got any comments?

jarrod1

is it not 40p for the first 10'000 miles ?

Pint_of_Gem

jarrod1 wrote: »

is it not 40p for the first 10'000 miles ?

Only if using your own vehicle. It will be a company car. 40p would include wear and tear and proportionate costs for insurance and tax which are covered by the company

jarrod1

oh right, sorry.
So do you pay for the fuel and claim the mileage back or is the 10.5p a mile on top of your wage ?
If they already supply you with the car then it wouldnt be much for them to provide you with a fuel card too.
I worked for a wholesaler who supplied me with a car also but i always felt like i was losing out on the personal mileage part.

Pint_of_Gem

At the present time I use an all star fuel card. At the end of each month I submit a form with my business miles and private miles clearly shown. In my next pay packet my private miles are multiplied by 10p and taken off me as a deduction. Apparently this is not a good thing from the HMRC point of view.

Therefore, when the new car arrives I will get a new fuel card, but when I submit the mileages at the end of the month they will only look at the business miles section, times that by 10.5p per mile and 'pay me back' that amount. The whole of the fuel card bill will be taken off of me as a deduction.

The situation is therefore reversed.

In other words, at the moment it doesn't make a difference to me financially what I pay for diesel or how I drive. When I get the new car and the roles are reversed I shall be obtaining the cheapest fuel and driving like a vicar!

When I worked for my previous company I always thought I was missing out on the proper recompense for business miles. The tight gits always referred me to the HMRC rates and stated that I would be liable for income tax on anything paid above that rate.

LandyAndy

If you claim back at a mileage rate for your business miles there is no further tax implication for you.

If your employer pays all your fuel via a fuel card you will be additionally taxed on the 'benefit' of the fuel unless you make a contribution back to the employer for your private usage.

To and from your normal place of work isn't business mileage.

The way things are now, if you live reasonably close to work (say within 15 miles) you are probably better claiming the mileage for your business use.

LandyAndy

Pint_of_Gem wrote: »

At the present time I use an all star fuel card. At the end of each month I submit a form with my business miles and private miles clearly shown. In my next pay packet my private miles are multiplied by 10p and taken off me as a deduction. Apparently this is not a good thing from the HMRC point of view.

Therefore, when the new car arrives I will get a new fuel card, but when I submit the mileages at the end of the month they will only look at the business miles section, times that by 10.5p per mile and 'pay me back' that amount. The whole of the fuel card bill will be taken off of me as a deduction.

The situation is therefore reversed.

In other words, at the moment it doesn't make a difference to me financially what I pay for diesel or how I drive. When I get the new car and the roles are reversed I shall be obtaining the cheapest fuel and driving like a vicar!

When I worked for my previous company I always thought I was missing out on the proper recompense for business miles. The tight gits always referred me to the HMRC rates and stated that I would be liable for income tax on anything paid above that rate.

If they pay you below the HMRC rate you can get the rest back via your tax return.

Greenjacket

I drive my own private care a Rover 416 petrol auto,and cover between 2k-4k miles a month solely on business miles.
Until last July I was paid a flat 30p a mile regardless of how many miles I drove.
We were then forced by the company to accept a one off tax free payment of £3,500 and were put on a new scheme where we are now paid £300 per month in our expenses towards the cost of using our own cars at work,plus we can now only claim 16p a mile.
They also said we will no worse off as the short fall is fully reclaimable from the tax man.
Without getting too involved I feel that I am being shafted,and the company attitude is that I have nothing to complain about as I am according to them supposedly still making a profit out of the current deal? They have no current plans to improve this on this 16p deal.
Should I be concerned and if so what argument do I put to the to blow there policy out of the water!!:beer: Cheers Lads

lisyloo

Should I be concerned

Well you really need to work out whether you are making a loss, profit or breaking even.
Write down all the various costs and add them up.
Some of them you will have to estimate e.g. additional depreciation, additional repairs (over and above normal social use), but it's really not that hard to list and cost them.

and if so what argument do I put to the to blow there policy out of the water!!

If you are making a loss then I would have thought that showing them your workings would be a good idea.
However you would have been in a better posistion negotiating this before you accepted the £3500 payment.

Another option is to give them their money back and refuse to use your own personal car (if it's wasn't agreed in advance).
Obviously this could make things less convenient for you personally and might not make you appear a team player, but unless you agreed up front then I don't see that any employer cna actually force you to use your own car for the job.

Bob63

At £1.16/litre for diesel you will need to do better than 50mpg in your Megane estate to break even on the 10.5p/mile rate. HMRC rate, as you point out, is 11p/mile for the 6 months from 1st Jan to 30th June. In July HMRC will adjust the rate if fuel price has increased by more than 5% - clearly this is the case so that HMRC rate will increase. HMRC website says you can claim tax back on expenses not reimbursed. I think that means you can claim back 20% income tax (or 40% if you are a higher rate earner) on the 0.5p/mile loss - which is £5 per 1,000 miles. So in theory you'll be due either £1 or £2 of tax refund per 1,000 business miles. Not a huge amount of money offset against the real loss you will face if you mileage drops below 50mpg.

chipsdog

My husband gets a car allowance of £400 per month, any business miles are then claimed at 14p per mile, someone, has told him he can claim from the Tax man the difference between the 14p and 41p (Government rate), does anyone know what form needs to be used? can it be backdated?

many thanks