Been asked to use my own car for business use

[Pints]

Munter said:

I can't see any employer doing that!

At our company ff there's any business mileage to be done, you're either given a company car or fixed car allowance, or if you're doing business miles on an irregular basis they will arrange for a hire car.

We are strongly advised - nay, not permitted - to use our personal cars (unless on car allowance) for business use.

[mrmr96]

mxspyder said:

ONLY 45ppm?!!!

If paying for fuel alone, thats about 14mpg at current petrol prices. If you could manage 30mpg you would be up by 23p for every mile you drive.

I think there may be a tax issue with being paid over 40ppm? I think you will be taxed on 5ppm

If you claim over 12,000 miles you will be hit hard on tax - again I think the tax will be charged on 20ppm

As far as insurance goes - try Direct Line, as they include business for no extra cost.

SO much fail in one single post.

i) You're not "UP" but 23p/mile because of the additional cost of:
- Brakes
- Tyres
- Servcing
- Clutch
- Depreciation
- Other wear and tear (interior/suspension/stone chips etc)
Which is why there MUST be an excess of the mileage payment above merely the fuel element.

ii) The standard rates are:
- 45p for first 10k
- 25p thereafter
(you are correct that you have to pay income tax on any excess you're paid above these rates.)

[Munter]

Pints said:

Munter said:

I can't see any employer doing that!

At our company ff there's any business mileage to be done, you're either given a company car or fixed car allowance, or if you're doing business miles on an irregular basis they will arrange for a hire car.

We are strongly advised - nay, not permitted - to use our personal cars (unless on car allowance) for business use.

So even your employer is not concerned about funding your choice in car. If you choose a Veyron they are not going to up the car allowance to match your requirements. They offer a set amount of cash and it's up to you to be concerned about your choice of car you can afford based on that. OP is in the same position. He knows his fixed income, and the mileage rate. It's up to him to be concerned about the car within that.

[XDA]

HuntD said:

We have boggo 1.6/2.0 diesel company cars but my employer won't pay for the insurance as I am under 25 and so they have asked me to use my own car, even though when I took the job they said they’d take out a new insurance policy if and when I need it, now they are saying its not worth it.

So you're saying that your colleagues with company cars, pay for their own insurance?

Or are you also saying that your employer takes out a separate insurance policy for each company car?

[Munter]

XDA said:

HuntD said:

We have boggo 1.6/2.0 diesel company cars but my employer won't pay for the insurance as I am under 25 and so they have asked me to use my own car, even though when I took the job they said they’d take out a new insurance policy if and when I need it, now they are saying its not worth it.

So you're saying that your colleagues with company cars, pay for their own insurance?

Or are you also saying that your employer takes out a separate insurance policy for each company car?

Shirly he's just saying the company policy is over 25s only. And he's under. And the company doesn't want to stump up the money to change the company policy just for him.

[Pints]

Munter said:

So even your employer is not concerned about funding your choice in car. If you choose a Veyron they are not going to up the car allowance to match your requirements. They offer a set amount of cash and it's up to you to be concerned about your choice of car you can afford based on that. OP is in the same position. He knows his fixed income, and the mileage rate. It's up to him to be concerned about the car within that.

I think you're misunderstanding what I said in one of my previous posts. I had been referring to a previous comment which someone else had made.

I think we're singing from the same hymn sheet, just at a different pitch.

[HuntD]

cwis said:

One word answer. "No".

I walk in to work - as far as the company is concerned I don't have a car. If they want me at a different site, it's their problem, not mine...

Did they say the company insurance thing to you in writing? If so, hold them to it.

Not in writing no, but I'm afraid if I kick up a fuss they'll just give the role to someone else. I think I'll just have to suck it up for now and hope the experience pays off in the long run.

Munter said:

Shirly he's just saying the company policy is over 25s only. And he's under. And the company doesn't want to stump up the money to change the company policy just for him.

This is correct.

[texasjohn]

HuntD said:

I'm afraid if I kick up a fuss they'll just give the role to someone else. I think I'll just have to suck it up for now and hope the experience pays off in the long run.

I would be completely open in that case and pretty much say exactly what you have said above to your employer. Without kicking up a fuss you can still explain that it is going to result in you being out of pocket, even at 45ppm. Your M3 is an expensive car to maintain and run, but you are clearly eager to do this role and really appreciate the opportunity being given to you. Best case is they will consider your commitment and frank approach and ensure that you aren't out of pocket. Worst case, you will have to use your own car for now, however they will understand the position you are in as you have communicated the facts to them.

Say nothing at all and they will never know.

[Eric Mc]

The current tax feee mileage rates are 45p per mile for the first 10,00 miles and 25p on mileage above 10,000. You will not be taxed if your employer pays you at rates that do not exceed these amounts.

[mxspyder]

mrmr96 said:

mxspyder said:

ONLY 45ppm?!!!

If paying for fuel alone, thats about 14mpg at current petrol prices. If you could manage 30mpg you would be up by 23p for every mile you drive.

I think there may be a tax issue with being paid over 40ppm? I think you will be taxed on 5ppm

If you claim over 12,000 miles you will be hit hard on tax - again I think the tax will be charged on 20ppm

As far as insurance goes - try Direct Line, as they include business for no extra cost.

SO much fail in one single post.

i) You're not "UP" but 23p/mile because of the additional cost of:
- Brakes
- Tyres
- Servcing
- Clutch
- Depreciation
- Other wear and tear (interior/suspension/stone chips etc)
Which is why there MUST be an excess of the mileage payment above merely the fuel element.

ii) The standard rates are:
- 45p for first 10k
- 25p thereafter
(you are correct that you have to pay income tax on any excess you're paid above these rates.)

My response would be to this...

1. If paying for fuel alone...
2. I think there may be a tax issue...?

So much fail in reading one post - also see my post that followed that one.

BTW thanks for telling what wear out on a car, it valuable info.

[matlee]

This whole 45ppm thing, are people actually getting 45ppm or tax relief on 45ppm?

[Pints]

matlee said:

This whole 45ppm thing, are people actually getting 45ppm or tax relief on 45ppm?

Claim through expenses at 45ppm.

[Kermit power]

mxspyder said:

NickXX said:

The 45ppm is meant to cover fuel and all additional costs including the extra insurance burden.

Thats why I said if...

Given that 30mpg in petrol is £0.21 per mile, and lets say you do 10,000 miles a year, thats £2100 (before any tax liability is calculated) to pay for 1 service and insurance (which if you shop around is free)

Can you run a car doing 10k pa for £2100?

I know I can

You really think you can run a car doing 10k miles per annum for £2,100?

How much of that £2,100 have you allocated to depreciation?

Given your suggestion that you can get free servicing and insurance if you shop around, I assume (unless I'm missing a massive trick here) that you're talking about buying a brand new car?

Let's assume you go for a completely bog-standard, entry level Focus, given that you're not realistically going to be doing regular trips to the continent in anything much smaller. That's a whisker under £14k.

Depreciation on a bog standard new Focus will, if you're doing average mileage (unlikely with regular trips to the continent) and have no damage, cost you around 55% of the value of your Focus over the first three years.

To put that another way, it will cost you an average of £2,566 per annum in depreciation alone. Still think you can run a car for £2,100 a year with free insurance and servicing?

Of course, you can go to the other end of the scale and buy something which has finished depreciating, but then good luck fitting you insurance (for a driver under 25), servicing, tax, continental (because he's regularly going there) breakdown cover (which, remember, gets more expensive with the age of the vehicle), tyres, brakes and everything else you need into £2,100.

matlee said:

This whole 45ppm thing, are people actually getting 45ppm or tax relief on 45ppm?

Personally, I get 20ppm plus tax relief on an additional 25ppm (iirc)on top of my allowance in lieu of a company car, which I think is pretty reasonable.

The fact that I choose to do my business mileage in a V8 or a V6 4x4, neither of which average more than about 23mpg, therefore costing me a bit to do company miles is just that - my choice. Yes, I could be driving something that would fit inside the money I can claim, but then I would also be able to see my soul leaking out through the exhaust pipe in the rear view mirror if I did that, so I don't.

If I didn't get a company car/allowance, however, I wouldn't even consider driving on company business for less than the full 45ppm allowable under tax law, as it wouldn't even come close to covering the cost of the mileage even on a soul-sucker.

[Vee]

Hold, on, don't they need to pay you a car allowance on top as well as the mileage rate ??

[mrmr96]

Vee said:

Hold, on, don't they need to pay you a car allowance on top as well as the mileage rate ??

No. The mileage rate is supposed to cover the fuel, wear and tear, servicing and depreciation so that you're not out of pocket for using your own car.

The rate of 45ppm for 10k, then 25ppm thereafter is set by HMRC. If you're paid less than this then you are deemed to be out of pocket, so you can claim tax releif on the difference between what you would have got at 45ppm and what your employer actually paid you. If you're paid more than 45ppm then you're deemed to be having a benefit, so you have to pay income tax on the excess you're paid above the 45ppm.

If you have a company car then you'll be taxed on the value/emissions of the car a fixed monthly amount, because if you're basically just given a car which is for your exclusive use and which you get to take home etc (and use at weekends etc) then that's a benefit you have to pay tax on. You can then reclaim the cost of fuel used from work.

If you have access to a company pool car which isn't just for you and isn't taken home then it's not a benefit, so no income tax to pay. You just put fuel in it and reclaim the fuel from work.

So to conclude, there's several common ways of getting/using a car for work. The one we're talking about here is using ones own car, and getting paid a mileage rate off 45ppm. The reason why it's seen as potentially unfair is that with the cost of fuel rising, it can be difficult to run a thirsty motor on that rate. It would obviously be easier to run something like a bluemotion polo, because the servicing/depreciation/fuel/tyres etc cost would be lower in terms of ppm than something like the M3 which the OP drives. It's his choice to spend his money running his personal car, which obviously costs him money. However to ask him to drive it significantly more miles per year and only pay a rate which will leave him out of pocket on a ppm basis seems unfair.

[Munter]

matlee said:

This whole 45ppm thing, are people actually getting 45ppm or tax relief on 45ppm?

45ppm here as well. (Up to 10k then 25ppm after)

Vee said:

Hold, on, don't they need to pay you a car allowance on top as well as the mileage rate ??

No. That's between you and the company to decide. But they are not forced to do so.

[Munter]

I thought I'd create a spreadsheet to see where I stand moneywise now (given fuel prices have gone up ~70% since I started claiming mileage).

If you fancy a play with it you should be able to download it here:
Here

Just edit the green fields to match your situation.

And if it's wrong please publicly ridicule me here.

[Johnboy Mac]

Your employer is either taking the p1ss or haven't given the situation/request enough consideration. Time for a friendly & frank meeting. Make sure you have clear figures to hand including an insurance quote for business use.

[mrmr96]

Munter said:

I thought I'd create a spreadsheet to see where I stand moneywise now (given fuel prices have gone up ~70% since I started claiming mileage).

If you fancy a play with it you should be able to download it here:
Here

Just edit the green fields to match your situation.

And if it's wrong please publicly ridicule me here.

Good start but your spreadsheet assumes that you buy a car and run it soley for business.

What might be more relevant would be a calculation of what the ppm costs are, so you can determine if you're going to make a "profit" or a "loss" on business mileage - so you can decide whether to take your car or a hire car or whatever.

[Munter]

mrmr96 said:

Good start but your spreadsheet assumes that you buy a car and run it soley for business.

What might be more relevant would be a calculation of what the ppm costs are, so you can determine if you're going to make a "profit" or a "loss" on business mileage - so you can decide whether to take your car or a hire car or whatever.

Fair enough. I have essentially bought the car solely for business usage, and consider the ability to do some personal miles a bonus. And in my haste didn't consider the monthly payment scenario.

Ah well. If you happen to be me it's useful!