How to expense fuel
Discussion
Wonder if someone could offer thoughts on this. I'm an employee, I go out seeing customers fairly regularly.
The company historically has paid the value of the fuel used for business, so in practical terms, what I'd do is go to the appointment, fill up on the way home and expense the receipt
As of Oct 6 what they want us to do is claim pence per mile, as it's easier for our accountants to deal with (employer is a US company)
There's a gentlements agreement that while we have £0.40 ppm for the first 10k and £0.25 ppm for everything after that, actually claiming those values will send our expense bill soaring. So we're going to lower the miles done to mach the value of the receipt
My question (finally)...do I need to inform HMRC about any of this come EOY?
The company historically has paid the value of the fuel used for business, so in practical terms, what I'd do is go to the appointment, fill up on the way home and expense the receipt
As of Oct 6 what they want us to do is claim pence per mile, as it's easier for our accountants to deal with (employer is a US company)
There's a gentlements agreement that while we have £0.40 ppm for the first 10k and £0.25 ppm for everything after that, actually claiming those values will send our expense bill soaring. So we're going to lower the miles done to mach the value of the receipt
My question (finally)...do I need to inform HMRC about any of this come EOY?
Cheers, but I dont want to!
Today I did a 400 mile round trip, cost to me about £45. But at 40ppm it's crazy, and I cant see how it can be justified given we get car allowances as well.
So, the current thinking is we'll just say we did say 120 miles instead to get the monetary value to line up
Is there anything to worry about with doing that?
Today I did a 400 mile round trip, cost to me about £45. But at 40ppm it's crazy, and I cant see how it can be justified given we get car allowances as well.
So, the current thinking is we'll just say we did say 120 miles instead to get the monetary value to line up
Is there anything to worry about with doing that?
Why don't the company just lower the allowance if it's such a concern? The HMRC figures are maxima, not cast iron figures that you have to use.
The allowance is purely to cover fuel, it's the running costs of the car too. Maintenance, insurance, road tax. You might get a car allowance, but if it's a new car that'll barely cover depn I'd magine.
If you're only an employee, why do you worry so much that you're getting paid more?!
The allowance is purely to cover fuel, it's the running costs of the car too. Maintenance, insurance, road tax. You might get a car allowance, but if it's a new car that'll barely cover depn I'd magine.
If you're only an employee, why do you worry so much that you're getting paid more?!
Thanks all
H/Q just set the allowance based on what they skim read on the HMRC website, and we didnt really argue at the time. It's signed and done, even though we've since gone back and asked them if they're OK with it.
The reason for not wanting the total value is twofold;
1) Everyone knows what our expenses should roughly be over the course of a month or quarter as we generally do the same amount of appointments and other travel. If that suddenly goes up, and in some case it will be around 300% up, then there'll be a few questions asked
2) We know they're looking at staff cuts in EMEA and dont want to draw too much attention to ourselves
Just wanted to make sure that I wasnt going to get some kind of self cert requirement or a tax bill pop through the letterbox by underclaiming
H/Q just set the allowance based on what they skim read on the HMRC website, and we didnt really argue at the time. It's signed and done, even though we've since gone back and asked them if they're OK with it.
The reason for not wanting the total value is twofold;
1) Everyone knows what our expenses should roughly be over the course of a month or quarter as we generally do the same amount of appointments and other travel. If that suddenly goes up, and in some case it will be around 300% up, then there'll be a few questions asked
2) We know they're looking at staff cuts in EMEA and dont want to draw too much attention to ourselves
Just wanted to make sure that I wasnt going to get some kind of self cert requirement or a tax bill pop through the letterbox by underclaiming
If the company is paying you less than the 40p/25p HMRC amounts for using your own car, rather than getting a tax bill, you would be entitiled to claim a repayment. If the company was to pay you 10p per mile for example, you are entitiled to claim the difference between that and the HMRC rates as an expense. If you do not complete SA returns, this can be done using form P87.
Brown and Boris said:
Is the 40p and 25p, per person?
So, if my wife drove (we work together) she could claim 10,000 mles at 40p too, after my 10,000 at 40P a mile had dropped to 25p, even if it is the same car??
You have to state the vehicle including registration number on your claim so I doubt this would be successful. Your pay office might not spot it as you are 2 separate individuals, but I suspect HMRC might be in touch.So, if my wife drove (we work together) she could claim 10,000 mles at 40p too, after my 10,000 at 40P a mile had dropped to 25p, even if it is the same car??
You're allowed an extra 5p per mile for passengers though.
I take it you're aware that this is for work journeys only? You can't claim the commute in and home you know!
andyquantum said:
1) Everyone knows what our expenses should roughly be over the course of a month or quarter as we generally do the same amount of appointments and other travel. If that suddenly goes up, and in some case it will be around 300% up, then there'll be a few questions asked
Well if they've changed the way expenses are claimed then surely they should expect a change.The car allowance is normally to cover the capital and fixed costs of running a suitable car. The mileage allowance should cover the variable costs - fuel, servicing etc. Most decent companies pay £5-600/mth allowance and 15-18p per mile. As other have mentioned, you can claim a tax rebate on the difference between your mileage allowance and HMRC's 40/25p rates for up to 10K/over 10K. Note you only get the tax back, ie 40% of the difference, not the whole difference.
If you're happy to walk away from the HMRC rebate then I guess you can claim whatever you want from your company. Hard to imagine that understating the mileage would be an issue, but it's always a bit dodgy to falsify an expenses claim.
andyquantum said:
I really dont think they've done the maths on it. Moreso after we all got an email tonight saying the company Xmas party/getogether over in the US has been cancelled and they're looking at all possible ways to save money. Seems like I cant do right for doing wrong on this one
I'd get looking for a new job and rack as many miles as possible up. 
Incase anyone's interested, this one took a strange turn today. The powers that be have declared that over the odds payments are to have income tax applied to them.
I thought this might happen, and have been underclaiming the total miles covered so it matches roughly the cost of the fuel I've used, so covering 200 miles, claiming @ 40ppm for say 80 of them
The employer isnt sure what to do next and we've sent it out to GTUK who do our bean type stuff. Question now is, am I going to be losing money carrying on under claiming, and should I settle for paying income tax on whats being termed as a benefit?
Edited for splelling
I thought this might happen, and have been underclaiming the total miles covered so it matches roughly the cost of the fuel I've used, so covering 200 miles, claiming @ 40ppm for say 80 of them
The employer isnt sure what to do next and we've sent it out to GTUK who do our bean type stuff. Question now is, am I going to be losing money carrying on under claiming, and should I settle for paying income tax on whats being termed as a benefit?
Edited for splelling
Edited by andy-xr on Thursday 6th November 18:53
So what are these "over the odds payments" that you refer to?
You're allowed 40p for up to 10K and 25p for over 10K business miles without extra tax liability - which is exactly what you said you were getting.
I would assume that's for business miles claimed, rather than covered. ie if you do 200miles but claim 40miles then it counts as 40 miles. I'm not certain about that, but can't imagine why anyone would care if you underclaimed.
Seems bonkers - I just claimed £800 for last month and that was all at 25p - I blew through 10K within 4 mths. Oddly my business mileage seems to go up when the allowance drops to 25p per mile.
Check what other people are claiming for - we had a policy in my last big corporation job of discouraging small claims, but I went on a trip to the US with a senior manager and was astonished at the trivial things that he expensed.
You're allowed 40p for up to 10K and 25p for over 10K business miles without extra tax liability - which is exactly what you said you were getting.
I would assume that's for business miles claimed, rather than covered. ie if you do 200miles but claim 40miles then it counts as 40 miles. I'm not certain about that, but can't imagine why anyone would care if you underclaimed.
Seems bonkers - I just claimed £800 for last month and that was all at 25p - I blew through 10K within 4 mths. Oddly my business mileage seems to go up when the allowance drops to 25p per mile.
Check what other people are claiming for - we had a policy in my last big corporation job of discouraging small claims, but I went on a trip to the US with a senior manager and was astonished at the trivial things that he expensed.
I may have been giving half a story, but it was all I knew at the time. So, what the US think has happened up until October is the guys in the UK do an appointment, maybe some other running around, fill up with fuel, do another business trip, go see their mates, fill up etc and expense the lot
None of us have really done that, it's 90+% business miles for all of us. In any event, the old way has been termed a benefit in kind, and it's not going to continue
So what I now have is a suggested tax liability on "the old stuff" from April to October which I think I can get around, as whenever I've been somewhere I've started the day with a full tank and ended the day by brimming again, together with a receipt.
Whats confused me is that this has been discussed as subject to income tax because of it being a benefit. So, my new question is how do I sensibly speak to the tax office about it?
Another twist in the tail of this is my local tax office is Notts, but because our wages and expenses are paid by a 3rd party my tax office on the payslips is Surreny/N Hants.
Going forward, I cant see how we'd be subject to income tax on PPM so I think I may have had tat arse about face. Our CFO has just clarified
None of us have really done that, it's 90+% business miles for all of us. In any event, the old way has been termed a benefit in kind, and it's not going to continue
So what I now have is a suggested tax liability on "the old stuff" from April to October which I think I can get around, as whenever I've been somewhere I've started the day with a full tank and ended the day by brimming again, together with a receipt.
Whats confused me is that this has been discussed as subject to income tax because of it being a benefit. So, my new question is how do I sensibly speak to the tax office about it?
Another twist in the tail of this is my local tax office is Notts, but because our wages and expenses are paid by a 3rd party my tax office on the payslips is Surreny/N Hants.
Going forward, I cant see how we'd be subject to income tax on PPM so I think I may have had tat arse about face. Our CFO has just clarified
You get a car allowance. This should be subject to a BiK tax. There is the HMRC AMAP - Approved Mileage Allowance Payment.#
Say you do 12000 business miles a year. Over the year you can claim £4500 tax and NI free (ie 10,000 miles x 40p/mile and 2000 miles x 25p /mile.
This is £375/month
If your car allowance is less than £375/month you would have no tax liability. If your allowance is more than the monthly AMAP allowance based on your business miles, there would be a PAYE and NI liability for you on th excess and an employers NI liability for your employer.
Say you do 12000 business miles a year. Over the year you can claim £4500 tax and NI free (ie 10,000 miles x 40p/mile and 2000 miles x 25p /mile.
This is £375/month
If your car allowance is less than £375/month you would have no tax liability. If your allowance is more than the monthly AMAP allowance based on your business miles, there would be a PAYE and NI liability for you on th excess and an employers NI liability for your employer.
I wasnt aware that the car allowance and the business mileage were related?
So the answer to that one is yes, I get over £4500 pa and yes I'm taxed on it
As to how many business miles I do pa, I *think* it's going to be somewhere around 16k
Off the back of what I've learned today both from company on here and our head office, I'm wondering if it's worth my while going back to my receipts from April onwards and claiming back the up to 40/up to 25ppm allowances, as all I did was expense the fuel I used, which on an MPG calculator works out to around 11ppm.
From the sounds of it I'm going to have to do that anyway to work ou what the tax people think I owe them, when it may be that they owe me
So the answer to that one is yes, I get over £4500 pa and yes I'm taxed on it
As to how many business miles I do pa, I *think* it's going to be somewhere around 16k
Off the back of what I've learned today both from company on here and our head office, I'm wondering if it's worth my while going back to my receipts from April onwards and claiming back the up to 40/up to 25ppm allowances, as all I did was expense the fuel I used, which on an MPG calculator works out to around 11ppm.
From the sounds of it I'm going to have to do that anyway to work ou what the tax people think I owe them, when it may be that they owe me
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