The budget will Approved Mileage Allowance Payments go up?

[andyps]

andyps said:

It would be great to see it increased, but I think that it is just as likely I will see a pig fly past the window.

I wasn't near a window at the time so didn't see the pig fly past! Pleasantly surprised at the announcement!

[Pesty]

Welshbeef said:

For those doing over 10k miles a year you will get an additional £500pa that's certainly going to help and in isolation should pay for annual car insurance.

So say INS is £500
mot £50
tax £200
servicing £350
tyres guess new set every 25k so average £250 per 10k

so total of above is £1350
then fuel let's say your car does 0.16 per mile so that's £1600

so grand total of c£2k cost for the first 10k miles therefore an additional £2.5k to pay for more tyres more servicing.

It's a benefit.

After 10k as I've illustrated you only need to pay for fuel and 0.25 is roughly 25mpg in a petrol as I've just filled up the wifes car brim to brim. Should be enough. I mean driving an M5 would just be silly

depreciation?

insureance on mine is 800 because Im a good boy and declair business use

[andyps]

Welshbeef said:

For those doing over 10k miles a year you will get an additional £500pa that's certainly going to help and in isolation should pay for annual car insurance.

So say INS is £500
mot £50
tax £200
servicing £350
tyres guess new set every 25k so average £250 per 10k

so total of above is £1350
then fuel let's say your car does 0.16 per mile so that's £1600

so grand total of c£2k cost for the first 10k miles therefore an additional £2.5k to pay for more tyres more servicing.

It's a benefit.

After 10k as I've illustrated you only need to pay for fuel and 0.25 is roughly 25mpg in a petrol as I've just filled up the wifes car brim to brim. Should be enough. I mean driving an M5 would just be silly

I can't agree with you on the figures.
- Insurance costs increase the higher the mileage (if you are honest with an insurance company in relation to the declared mileage).
- Servicing is mileage related in all cars so the higher the miles the more servicing costs
- Tyres don't stop wearing out just because you have already done 10k miles so the cost increases with mileage
- depreciation is definitely a factor, go beyond 10k miles per year and it is classed as above average and at sale time the value is hit.

All of these add up to more than the cost of fuel, which for my last tank was 22p per mile, so 3p per mile for all other car expenses if I exceed 10k business miles. That is with 27mpg in a petrol car, so not excessively thirsty.

[RYH64E]

Welshbeef said:

For those doing over 10k miles a year you will get an additional £500pa that's certainly going to help and in isolation should pay for annual car insurance.

So say INS is £500
mot £50
tax £200
servicing £350
tyres guess new set every 25k so average £250 per 10k

so total of above is £1350
then fuel let's say your car does 0.16 per mile so that's £1600

so grand total of c£2k cost for the first 10k miles therefore an additional £2.5k to pay for more tyres more servicing.

It's a benefit.

After 10k as I've illustrated you only need to pay for fuel and 0.25 is roughly 25mpg in a petrol as I've just filled up the wifes car brim to brim. Should be enough. I mean driving an M5 would just be silly

I'm sure that you could make money on the £0.45/£0.25 mileage allowances if you chose a car specifically for the purpose, but formost people using their existing car it is far from generous.

Adding 10,000 business miles to an existing private mileage will certainly increase depreciation. Take the example of a newish car with 12000 private miles per year, 36000 in 3 years, or the same car with an additional 10,000 business miles, 22,000 per year or 66,000 in 3 years. Would they have the same value?

New cars depreciate, old cars break down, and neither form of motoring is particularly cheap. Having said that, I would rather claim mileage than have a company car, been there and been heavily taxed on it - not doing it again!

[oyster]

Is everyone missing the point about mileage reimbursement.

The 45p/25p are only the levels at which reimbursement becomes taxable. The actual level you receive is up to your company. I've got clients who will only pay 30p a mile regardless of total mileage. I have another client who'll pay 70p a mile which is very generous.


And another point. An extra 5p a mile for the first 10k miles won't give you another £500 in your pocket - it's just £500 less taxable income. So it'll be an extra £250/£200/£100 in your pocket depending on what tax rate you pay.

[Mojocvh]

andyps said:

I wasn't near a window at the time so didn't see the pig fly past! Pleasantly surprised at the announcement!

:yep: now jump through the hoops to get it.

[s3fella]

oyster said:

Is everyone missing the point about mileage reimbursement.

The 45p/25p are only the levels at which reimbursement becomes taxable. The actual level you receive is up to your company. I've got clients who will only pay 30p a mile regardless of total mileage. I have another client who'll pay 70p a mile which is very generous.


And another point. An extra 5p a mile for the first 10k miles won't give you another £500 in your pocket - it's just £500 less taxable income. So it'll be an extra £250/£200/£100 in your pocket depending on what tax rate you pay.

It will be another £500 for those paid on the approved rates only. This includes all public sector workers for example who use their own cars.

45p per mile is still no where near what it costs to run a car. The simple way to verify is to look at the lease companies pence per mile calculators, and sites like the AA show pence per mile breakdowns per model, too. You dont get much (or anything!) for 40p per mile!

[RYH64E]

oyster said:

Is everyone missing the point about mileage reimbursement.

The 45p/25p are only the levels at which reimbursement becomes taxable. The actual level you receive is up to your company. I've got clients who will only pay 30p a mile regardless of total mileage. I have another client who'll pay 70p a mile which is very generous.


And another point. An extra 5p a mile for the first 10k miles won't give you another £500 in your pocket - it's just £500 less taxable income. So it'll be an extra £250/£200/£100 in your pocket depending on what tax rate you pay.

A lot of companies, mine included, pay the approved rates - it's written into our terms and conditions of employment. So it will be an extra £0.05 per mile in our pockets.

[Deva Link]

andyps said:

so 3p per mile for all other car expenses if I exceed 10k business miles.

Plus your tax rebate.

[Pesty]

oyster said:

Is everyone missing the point about mileage reimbursement.

And another point. An extra 5p a mile for the first 10k miles won't give you another £500 in your pocket - it's just £500 less taxable income. So it'll be an extra £250/£200/£100 in your pocket depending on what tax rate you pay.

Not understanding this.

Today I drove 291 miles to visit a customer Im on 25p a mile because 10k miles went ages ago so I claim £72.75
and thats exactly what I get back. I don't pay any tax on it. This money is paid directly into another account I have set up.
In April I will get 45p a mile and that will get paid directly into that account as well. It is totaly seperate to my income.

are you on about something different?

[Welshbeef]

Deva Link said:

Plus your tax rebate.

and if it doesn't make sense ask for a co car instead or demand a hire car for all trips.
Or get a pay rise to cover it or allow working from home for x days a week to save on commuting costs

[Deva Link]

Deva Link said:

andyps said:

so 3p per mile for all other car expenses if I exceed 10k business miles.

Plus your tax rebate.

Sorry, I'm going mad. There's no additional tax rebate if you're getting 25p/mile for mileage in excess of 10K. There would be if you only got 25P for sub-10K miles.

[Engineer1]

The allowances aren't there to finance your car, it's there to cover the extra cost associated with using your car.
So any extra insurance cost due to higher mileage or business use, the additional wear and servicing, extra fuel etc. After all if you didn't use your car for business you would still be paying insurance, tax etc.

[Welshbeef]

Deva Link said:

Deva Link said:

andyps said:

so 3p per mile for all other car expenses if I exceed 10k business miles.

Plus your tax rebate.

Sorry, I'm going mad. There's no additional tax rebate if you're getting 25p/mile for mileage in excess of 10K. There would be if you only got 25P for sub-10K miles.

What?
You get £4500 for the first 10k miles and then £0.25 thereafter.

Before budget you got £4000 for the first 10k then £0.25 thereafter

net gain of £500

if your employer gives you diddly squat then demand a co car or take a hire car instead and put that through expenses or get a payrise to cover your costs.
Hire car gets them thinking it's expensive so co car makes a lot of sense to them.

Or catch a train everywhere with taxi each end that really gets them thinking.

[RYH64E]

Engineer1 said:

The allowances aren't there to finance your car, it's there to cover the extra cost associated with using your car.
So any extra insurance cost due to higher mileage or business use, the additional wear and servicing, extra fuel etc. After all if you didn't use your car for business you would still be paying insurance, tax etc.

Insurance can be significantly more expensive if business use is declared, and depreciation will increase with mileage. If the business use is modest the extra cost of insurance could be more than the total mileage claim. Tax will be the same though.

[Deva Link]

RYH64E said:

Insurance can be significantly more expensive if business use is declared,

In my experience there's often no extra cost. Some companies include it as standard anyway.

My daughter added business use to her policy with Admiral and the premium went down.

[Pesty]

really?

can you give me her insureance company because it always adds hundreds to every time I have ever had a quote.

Apparently you are 50% more likely to claim if you are a user for business or so they have told be in the past

£800 for a friging diesel st box would normaly cost me about £450

[andyps]

I'm self employed so it isn't a case of putting in a claim for the expenses, it is something which I can offset against tax for the cost of using my car for business travel. The extra 5p will help, but in reality it is just £100 reduction in the tax I pay, or £200 at the 40% rate. That is probably a lot less than the extra I will already have paid for fuel in 2011 with the way the price has increased recently so not much compensation really, but better than nothing.

[Deva Link]

Pesty said:

really?

can you give me her insureance company because it always adds hundreds to every time I have ever had a quote.

Apparently you are 50% more likely to claim if you are a user for business or so they have told be in the past

£800 for a friging diesel st box would normaly cost me about £450

It says it in my post - Admiral.

I used to have a car with Co-op insurance and that included business as standard and eSure does too. (check for yourself before committing though!).

I use Liverpool Victoria and pay £240/yr (£100 excess) for Class 1 business on a Merc C270CDi.

[oyster]

Pesty said:

Not understanding this.

Today I drove 291 miles to visit a customer Im on 25p a mile because 10k miles went ages ago so I claim £72.75
and thats exactly what I get back. I don't pay any tax on it. This money is paid directly into another account I have set up.
In April I will get 45p a mile and that will get paid directly into that account as well. It is totaly seperate to my income.

are you on about something different?

But why will you get 45p a mile in April?

Presumably you'll get that because your company will change its policy in line with HMRC rates. But it doesn't have to. That's the point I'm making.

You could ask for £1 a mile from your employer if you wanted to. As it happens many companies do match the AMAP rates for their re-imbursement rates, but many don't.