Change to company car allowance
Discussion
TheSurveyor said:
Hi all
The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
My rate per mile changes according to fuel price. It was around 12ppm, it's now 17ppm. The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
Apart from that, this is usual IME.
45ppm is normally reserved for those using their personal cars for work, not those receiving an allowance.
Are you sure you were getting 45p a mile on top of a car allowance??
The best I ever had whilst in receipt of an allowance or company car was 17p per mile, which I once figured out meant I had to average 68mpg or better on every run to break even! That's when I started taking the train and claiming that on expenses!
The best I ever had whilst in receipt of an allowance or company car was 17p per mile, which I once figured out meant I had to average 68mpg or better on every run to break even! That's when I started taking the train and claiming that on expenses!
TheSurveyor said:
Hi all
The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
I know a few companies who have done this. One of my friends used to get £600/month car allowance and 45p mile. The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
The office was a 450 mile round trip - nice.
You can only claim the tax of the difference, so 45p - 13p = 32p*tax rate.
Yeah pretty normal.
Employees who don't have a company car or car allowance can be reimbursed 45ppm by their employer, and this is designed to cover the full cost of running the car for the journey (tax, tyres, depreciation etc). Obviously some winners and losers, and some employers will only reimburse the minimum and the employee has to claim the difference back from HMRC.
Where you have a company car allowance, the argument is that a bulk of those costs have been covered by the allowance - buying the car, taxing it, insuring it etc. For the same reason most people with a company car can only claim the Advisory Fuel Rate which is between 12p and 20p depending on petrol/diesel and engine size.
How many miles do you do? There will be a tipping point when the higher PPM is more attractive, but I doubt your employer has made the change to be more generous on their allowances...
Employees who don't have a company car or car allowance can be reimbursed 45ppm by their employer, and this is designed to cover the full cost of running the car for the journey (tax, tyres, depreciation etc). Obviously some winners and losers, and some employers will only reimburse the minimum and the employee has to claim the difference back from HMRC.
Where you have a company car allowance, the argument is that a bulk of those costs have been covered by the allowance - buying the car, taxing it, insuring it etc. For the same reason most people with a company car can only claim the Advisory Fuel Rate which is between 12p and 20p depending on petrol/diesel and engine size.
How many miles do you do? There will be a tipping point when the higher PPM is more attractive, but I doubt your employer has made the change to be more generous on their allowances...
Kermit power said:
Are you sure you were getting 45p a mile on top of a car allowance??
The best I ever had whilst in receipt of an allowance or company car was 17p per mile, which I once figured out meant I had to average 68mpg or better on every run to break even! That's when I started taking the train and claiming that on expenses!
Are you including purchase cost and depreciation in that 68mpg?The best I ever had whilst in receipt of an allowance or company car was 17p per mile, which I once figured out meant I had to average 68mpg or better on every run to break even! That's when I started taking the train and claiming that on expenses!
On pure running costs - fuel and maintenance - my 2017 5 series is a touch over £0.13p per mile over the last 43000 miles.
B9 said:
Yeah pretty normal.
Where you have a company car allowance, the argument is that a bulk of those costs have been covered by the allowance - buying the car, taxing it, insuring it etc. For the same reason most people with a company car can only claim the Advisory Fuel Rate which is between 12p and 20p depending on petrol/diesel and engine size.
In my experience these days car allowances aren't enough for that, i.e. they have not kept up with inflation or ever increasing car costs. I get £5k per annum before tax as my allowance, but generally average around 10-15k business miles per annum (did 8k over four months last summer even!). So you can imagine the impact of depreciation and higher maintenance costs that would bring, before even purchase of the car.Where you have a company car allowance, the argument is that a bulk of those costs have been covered by the allowance - buying the car, taxing it, insuring it etc. For the same reason most people with a company car can only claim the Advisory Fuel Rate which is between 12p and 20p depending on petrol/diesel and engine size.
TheSurveyor said:
Hi all
The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
I’m not sure if you WOULD get any money back from tax. The allowance would cover the fixed costs and the 13ppm should (theoretically) cover the fuel element.The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
Countdown said:
TheSurveyor said:
Hi all
The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
I’m not sure if you WOULD get any money back from tax. The allowance would cover the fixed costs and the 13ppm should (theoretically) cover the fuel element.The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
anonymous said:
[redacted]
I don't think I'm wrong (
) but I have just realised that my experience might be different from the "norm".Where I used to get car allowance it wasn't taxed but we received a lower mileage rate (25ppm I think). At the end of the year the car allowance plus our mileage reimbursements were put on a P11D and sent to HMRC. They would then tax you if you hadn't done enough miles. I think the calculation was something like
If (car allowance + mileage payments)/mileage done > 45p then you owed HMRC some extra tax.
However if the car allowance is taxed when paid then my comments are not relevant. Apologies for any confusion
TheSurveyor said:
Hi all
The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
Accept what others say, but I've worked in field sales jobs for many years and I've never heard of any 'normal' employee getting both. The company I work for pay a car allowance and previously allowed charge back of mileage at 45ppm.
This has now changed to an increased car allowance but the mileage rate has been reduced to 13ppm and the rest claimed back by P87 self assessment.
Is this usual?
Cheers
Ours was £600/mth and 15p/mile. I'm aware of people in other companies who don't get any fixed allowance but do get the full 45p/25p mileage claim, but that's not been working well since Covid!
Sheepshanks said:
Accept what others say, but I've worked in field sales jobs for many years and I've never heard of any 'normal' employee getting both.
Ours was £600/mth and 15p/mile. I'm aware of people in other companies who don't get any fixed allowance but do get the full 45p/25p mileage claim, but that's not been working well since Covid!
I know people who got both the allowance and 45p. Very rare but it does happen, bizarrely.Ours was £600/mth and 15p/mile. I'm aware of people in other companies who don't get any fixed allowance but do get the full 45p/25p mileage claim, but that's not been working well since Covid!
My employer rolled the allowance into base salary just as I joined so I effectively get the allowance and 45p a mile for using my car. As far as the company is concerned, and HMRC, there is no car allowance (now).
A couple of trips to head office a month pays the lease on the car, three pays for all the private fuel as well.
A couple of trips to head office a month pays the lease on the car, three pays for all the private fuel as well.
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