IR recommended mileage rate.
Discussion
sixpot said:
I do not have the privelage of owning an all expenses paid company car during this time of ridiculously expensive fuel. Is it not time the IR increased their recommendations to companies. I understand it currently stands at 40p/mile. Anyone have the inside track
Only for the first 10,000 miles then it falls to 25p a mile.
Despite rising fuel prices this has been the same rate since the 5 April 2001 (for cars 1,500 cc or lower) so we may not see a change anytime soon.
An employee can claim UP TO 40p per mile for any journeys undertaken on behalf of their employer persuant to their employment. After 10,000 such miles, the limit reduces to 25p per mile. These are MAXIMUM limits. If an employer pays more than these rates, the employee will suffer additional PAYE deducted on their salary under the Benefit in Kind rules.
To be honest, most employers do not pay right up to these maximum limits anyway.
In circumstances where the employee receives mileage at BELOW these rates, the employee can make a claim for the difference directly to the Inland Revenue.
These rates are based on details provided by the AA and RAC to the government and are supposed to cover ALL the costs of using your own car, not just petrol.
>> Edited by Eric Mc on Tuesday 6th September 12:01
To be honest, most employers do not pay right up to these maximum limits anyway.
In circumstances where the employee receives mileage at BELOW these rates, the employee can make a claim for the difference directly to the Inland Revenue.
These rates are based on details provided by the AA and RAC to the government and are supposed to cover ALL the costs of using your own car, not just petrol.
>> Edited by Eric Mc on Tuesday 6th September 12:01
Simple method is to fill in a tax claim form.
However, nowadays, simple claims like this can often be sorted out over the telephone.
Contact your tax district - you'll see your tax office reference on the P60 you received from your employer after 5 April 2005.
>> Edited by Eric Mc on Tuesday 6th September 12:07
However, nowadays, simple claims like this can often be sorted out over the telephone.
Contact your tax district - you'll see your tax office reference on the P60 you received from your employer after 5 April 2005.
>> Edited by Eric Mc on Tuesday 6th September 12:07
Eric Mc said:
An employee can claim UP TO 40p per mile for any journeys undertaken on behalf of their employer persuant to their employment. After 10,000 such miles, the limit reduces to 25p per mile. These are MAXIMUM limits. If an employer pays more than these rates, the employee will suffer additional PAYE deducted on their salary under the Benefit in Kind rules.
To be honest, most employers do not pay right up to these maximum limits anyway.
In circumstances where the employee receives mileage at BELOW these rates, the employee can make a claim for the difference directly to the Inland Revenue.
These rates are based on details provided by the AA and RAC to the government and are supposed to cover ALL the costs of using your own car, not just petrol.
>> Edited by Eric Mc on Tuesday 6th September 12:01
Eric
Quick question. Would those rates be expected to include road tolls as well? I’m racking up a small fortune in road tolls using my own car on company business at the moment and haven’t been claiming anything over and above the straight mileage allowance.
Eric Mc said:
An employee can claim UP TO 40p per mile for any journeys undertaken on behalf of their employer persuant to their employment. After 10,000 such miles, the limit reduces to 25p per mile. These are MAXIMUM limits. If an employer pays more than these rates, the employee will suffer additional PAYE deducted on their salary under the Benefit in Kind rules.
To be honest, most employers do not pay right up to these maximum limits anyway.
In circumstances where the employee receives mileage at BELOW these rates, the employee can make a claim for the difference directly to the Inland Revenue.
These rates are based on details provided by the AA and RAC to the government and are supposed to cover ALL the costs of using your own car, not just petrol.
>> Edited by Eric Mc on Tuesday 6th September 12:01
How far back can I go....in terms of the claim that is. Just worked out they owe me over £250.00 this year alone.
I get a reduced business rate of 11p/mile as I get a company car (but no fuel).
If I average 40mpg and diesel presently costs an average of 96p/litre, then actual cost to me is about 10.8p. If diesel goes to £1, then actual cost to me is 11.25p. At that stage I am effecively subsidising the firm!!
If I average 40mpg and diesel presently costs an average of 96p/litre, then actual cost to me is about 10.8p. If diesel goes to £1, then actual cost to me is 11.25p. At that stage I am effecively subsidising the firm!!
As far as you like - although possibly the Statute of Limitations of six years might be applied by the Inland Revenue if you try to go back too far.
The rates take into account ALL vehicle running costs. That would include road tolls.
Maybe you should make your employer pay the road tolls (and all the other newish charges such as congestion charges) directly. The rates have not been seriously amended since before these new types of charges were introduced.
The rates take into account ALL vehicle running costs. That would include road tolls.
Maybe you should make your employer pay the road tolls (and all the other newish charges such as congestion charges) directly. The rates have not been seriously amended since before these new types of charges were introduced.
Eric Mc said:
Maybe you should make your employer pay the road tolls (and all the other newish charges such as congestion charges) directly. The rates have not been seriously amended since before these new types of charges were introduced.
Ah yes but wouldn't that then be a benefit in kind since I am already claiming mileage allowance?
I would think that it should be possible to escape a BIK charge on the company paying tolls and congestion charges directly. BIKs arise when the company pays the expense of an employee. If the expense is deemed to be a direct business cost, then it has nothing to do with the employee and is not a BIK.
The actual manner in which the expense is paid can make this easier to escape a BIK - like providing the employee with a company pay card or credit card which can only be used for paying company incurred costs - i.e. there is no element of reimbursement to an employee. The company is paying its own business expenses incurred in its own business card. The employee is merely handling the card on behalf of the employer and incurrs no out of pocket expenses of his own.
In those circumstances, if the employee is using his own car for business trips, he can still claim up to the 40p limit without being taxed.
The actual manner in which the expense is paid can make this easier to escape a BIK - like providing the employee with a company pay card or credit card which can only be used for paying company incurred costs - i.e. there is no element of reimbursement to an employee. The company is paying its own business expenses incurred in its own business card. The employee is merely handling the card on behalf of the employer and incurrs no out of pocket expenses of his own.
In those circumstances, if the employee is using his own car for business trips, he can still claim up to the 40p limit without being taxed.
An alternative would be for you to claim the toll charges directly from the employer (outside of the 40p per mile system). You would then be potentially taxable on the toll/congestion charge income you have received but you would then cancel the charge by claiming the toll/congestion charge expenses paid directly by you as "expense incurred by you in the course of your employment) under Section 198.
Isn't tax fun?
Isn't tax fun?
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