Mileage rates with salary sacrifice?
Discussion
We're looking at maybe taking up the NHS salary sacrifice scheme, but I've a question about mileage rates.
As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
Fastlane said:
Salary sacrifice means it's your car and so you can claim up to 45p per mile. Whether they pay that or not us up to them.
4p per mile is for company provided cars only.
That's my understanding as well. Another way to look at it is the mileage rate covers depreciation. If you're effectively paying the depreciation then you're entitled to claim the 45ppm rate. OTOH if it's a company car you can only claim for the fuel (because you're not paying for insurance, road tax depreciation).4p per mile is for company provided cars only.
Countdown said:
Fastlane said:
Salary sacrifice means it's your car and so you can claim up to 45p per mile. Whether they pay that or not us up to them.
4p per mile is for company provided cars only.
That's my understanding as well. Another way to look at it is the mileage rate covers depreciation. If you're effectively paying the depreciation then you're entitled to claim the 45ppm rate. OTOH if it's a company car you can only claim for the fuel (because you're not paying for insurance, road tax depreciation).4p per mile is for company provided cars only.
Mine only pays 29p.
I do claim back tax on the remainder each year which usually adds up to a bit.
Countdown said:
Fastlane said:
Salary sacrifice means it's your car and so you can claim up to 45p per mile. Whether they pay that or not us up to them.
4p per mile is for company provided cars only.
That's my understanding as well. Another way to look at it is the mileage rate covers depreciation. If you're effectively paying the depreciation then you're entitled to claim the 45ppm rate. OTOH if it's a company car you can only claim for the fuel (because you're not paying for insurance, road tax depreciation).4p per mile is for company provided cars only.
As it's a company car there's no 45p mileage claims available. We were certainly told that this is an HMRC thing, not a company thing, so should apply everywhere. That said, I can't afford one of our salary sacrifice cars as they're so bloody expensive even on 0%BIK, so I never looked into it any further.
OP - I'd ask the HR people and get it in writing if I were you before committing to this.
sawman said:
Depends on the nhs trust. At my place if you have a salary sacrifice lease you get about double the owner driver rate, and if the lease is an EV you can charge it more or less for free at work.
I can't even begin to make sense of why they'd voluntarily want to pay someone who's already getting the benefit of salary sacrifice double the mileage rate of someone who has to run their own car.What I said above is wrong. A salary sacrifice car is treated as a company car by HMRC https://www.clm.co.uk/company-car-tax/#:~:text=Pri...
Therefore the advisory fuel rate 4p/mile - anything more than that will be considered as a benefit-in-kind and will be reportable on your P11D and therefore taxable.
Therefore the advisory fuel rate 4p/mile - anything more than that will be considered as a benefit-in-kind and will be reportable on your P11D and therefore taxable.
Blue Oval84 said:
I can't even begin to make sense of why they'd voluntarily want to pay someone who's already getting the benefit of salary sacrifice double the mileage rate of someone who has to run their own car.
They are trying to effect behaviour change - if all of the staff are driving around in EVs the net carbon liability (or whatever its called ) is reduced. Which i believe is helpful to the organisation. However the trust run a huge national leasing scheme this rate differential pre dated EVs as the trust were keen to get as many staff on the lease as possible. The EV charging is just another incentive (however long it lasts) I currently get 28p per mile for my own petrol car whilst my work pal gets 45 - 50 (not sure of actual number) for their sal sacrifice mini hybrid Edited by sawman on Sunday 13th December 11:14
Edited by sawman on Sunday 13th December 11:15
TooLateForAName said:
We're looking at maybe taking up the NHS salary sacrifice scheme, but I've a question about mileage rates.
As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
Where are you getting the 45p from? That's the HMRC rate for tax reclaim for using your own car. The Trust may pay the same amount, but they may not. As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
One of my daughters works in the NHS and she gets an odd rate - I have it in my head it's 56p - for using her own car. No idea how they're able to pay more than HMRC rate and it not be taxable. Again, from memory, it's quite limited in mileage - 4K/yr maybe.
Are you sure her mileage is claimable? HMRC may regard them as two regular workplaces - I recall there was a business mileage case for a Consultant who worked in two hospitals and he lost.
Sheepshanks said:
TooLateForAName said:
We're looking at maybe taking up the NHS salary sacrifice scheme, but I've a question about mileage rates.
As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
Where are you getting the 45p from? That's the HMRC rate for tax reclaim for using your own car. The Trust may pay the same amount, but they may not. As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
One of my daughters works in the NHS and she gets an odd rate - I have it in my head it's 56p - for using her own car. No idea how they're able to pay more than HMRC rate and it not be taxable. Again, from memory, it's quite limited in mileage - 4K/yr maybe.
Are you sure her mileage is claimable? HMRC may regard them as two regular workplaces - I recall there was a business mileage case for a Consultant who worked in two hospitals and he lost.
https://www.gov.uk/expenses-and-benefits-business-...
Pica-Pica said:
Anything above the HMRC rate (45p) is taxable and declarable, and that rate reduces above 10k miles per year. Most Trusts have dropped the payment rate below 45p.
https://www.gov.uk/expenses-and-benefits-business-...
Maybe this is some NHS specific deal as it's limited to 3500 miles (not 4K as I thought earlier) then it drops a lot - she's been told it's not taxable https://www.rcn.org.uk/employment-and-pay/nhs-mile...https://www.gov.uk/expenses-and-benefits-business-...
In practice she doesn't claim it and she doesn't think anyone she works with does - they don't do many miles between clinics and in her busy life it's not important enough to spend time on.
Sheepshanks said:
Pica-Pica said:
Anything above the HMRC rate (45p) is taxable and declarable, and that rate reduces above 10k miles per year. Most Trusts have dropped the payment rate below 45p.
https://www.gov.uk/expenses-and-benefits-business-...
Maybe this is some NHS specific deal as it's limited to 3500 miles (not 4K as I thought earlier) then it drops a lot - she's been told it's not taxable https://www.rcn.org.uk/employment-and-pay/nhs-mile...https://www.gov.uk/expenses-and-benefits-business-...
In practice she doesn't claim it and she doesn't think anyone she works with does - they don't do many miles between clinics and in her busy life it's not important enough to spend time on.
https://www.nhsemployers.org/tchandbook
Interestingly the link for the Health in Wales website DOES refer to HMRC rates and limits.
She should double-check about the taxation issue with her employers.
Sheepshanks said:
Where are you getting the 45p from? That's the HMRC rate for tax reclaim for using your own car. The Trust may pay the same amount, but they may not.
One of my daughters works in the NHS and she gets an odd rate - I have it in my head it's 56p - for using her own car. No idea how they're able to pay more than HMRC rate and it not be taxable. Again, from memory, it's quite limited in mileage - 4K/yr maybe.
Are you sure her mileage is claimable? HMRC may regard them as two regular workplaces - I recall there was a business mileage case for a Consultant who worked in two hospitals and he lost.
This is very much my OH helping out the trust which otherwise would not be able to provide services. 45p is what they are currently paying. She has reduced PAs in her actual location and is providing cover to 2 other clinics which haven't been able to recruit. One of my daughters works in the NHS and she gets an odd rate - I have it in my head it's 56p - for using her own car. No idea how they're able to pay more than HMRC rate and it not be taxable. Again, from memory, it's quite limited in mileage - 4K/yr maybe.
Are you sure her mileage is claimable? HMRC may regard them as two regular workplaces - I recall there was a business mileage case for a Consultant who worked in two hospitals and he lost.
When I was a freelance IT bod there was a rule on temporary workplaces that you could claim expenses for 18months before it became a regular workplace. I guess I need to revisit this, because the travel time+ car costs + overnight stays are a drag and if it isn't being paid for appropriatly then she should just go back to spending all her time at the clinic she works at.
The 4p and 45p rates are the tax thresholds. Salary sacrifice results in 4p for an EV.
Company can pay what they want but if they pay you more that that, the difference is taxable. It may be taxed at source. For simplicity companies typically pay the hmrc tax thresholds to company car owners but it’s not obligatory.
Worth noting with salary sacrifice and the nhs is it can bugger up your pension, it’s certainly worth checking for implications.
Company can pay what they want but if they pay you more that that, the difference is taxable. It may be taxed at source. For simplicity companies typically pay the hmrc tax thresholds to company car owners but it’s not obligatory.
Worth noting with salary sacrifice and the nhs is it can bugger up your pension, it’s certainly worth checking for implications.
TooLateForAName said:
This is very much my OH helping out the trust which otherwise would not be able to provide services. 45p is what they are currently paying. She has reduced PAs in her actual location and is providing cover to 2 other clinics which haven't been able to recruit.
When I was a freelance IT bod there was a rule on temporary workplaces that you could claim expenses for 18months before it became a regular workplace. I guess I need to revisit this, because the travel time+ car costs + overnight stays are a drag and if it isn't being paid for appropriatly then she should just go back to spending all her time at the clinic she works at.
If your OH is a medic, you should check out the BMA website for reimbursement info. It is different to the link posted earlier for agenda for change staff.When I was a freelance IT bod there was a rule on temporary workplaces that you could claim expenses for 18months before it became a regular workplace. I guess I need to revisit this, because the travel time+ car costs + overnight stays are a drag and if it isn't being paid for appropriatly then she should just go back to spending all her time at the clinic she works at.
Bear in mind that the salary sacrifice deal is usually 2 or 3 years, if mileage drops when she returns to normal work pattens the drop in milage isnt an issue but if it goes the other way, like any lease deal there are penaltys
sawman said:
Blue Oval84 said:
I can't even begin to make sense of why they'd voluntarily want to pay someone who's already getting the benefit of salary sacrifice double the mileage rate of someone who has to run their own car.
They are trying to effect behaviour change - if all of the staff are driving around in EVs the net carbon liability (or whatever its called ) is reduced. Which i believe is helpful to the organisation. However the trust run a huge national leasing scheme this rate differential pre dated EVs as the trust were keen to get as many staff on the lease as possible. The EV charging is just another incentive (however long it lasts) I currently get 28p per mile for my own petrol car whilst my work pal gets 45 - 50 (not sure of actual number) for their sal sacrifice mini hybrid Edited by sawman on Sunday 13th December 11:14
Edited by sawman on Sunday 13th December 11:15
CheesecakeRunner said:
Heres Johnny said:
The 4p and 45p rates are the tax thresholds. Salary sacrifice results in 4p for an EV.
Company can pay what they want but if they pay you more that that, the difference is taxable. It may be taxed at source. For simplicity companies typically pay the hmrc tax thresholds to company car owners but it’s not obligatory.
Ahah, you raise a good point. Those whose NHS trust pay more, such as the 56p quotes above, are you paid the mileage through payroll, or via expense claims? Because if through payroll, you’ll pay tax on it. And 56p -20% is just under 45p. Company can pay what they want but if they pay you more that that, the difference is taxable. It may be taxed at source. For simplicity companies typically pay the hmrc tax thresholds to company car owners but it’s not obligatory.
The 18 month thing quotes above is actually 24 months. Imaginatively called the 24 Month Rule :-)
https://www.gov.uk/hmrc-internal-manuals/employmen...
Basically you can claim expenses to a temp workplace for up to 24 months, or up to the point at which you know you’ll be working there for more than 24 months, then it becomes a normal place of work and you can’t claim commuting costs. Or rather you can, but the expenses would become taxable benefit. Some organisations work around this by continuing to pay expenses but at a higher level that negates the tax burden on the employee, so they’re not out of pocket.
Blue Oval84 said:
I'm not entirely sure there's any actual financial benefit to the NHS for paying people more per mile than they need to (although I would love to be proven wrong), even if that means that more employees ultimately choose an EV. It sounds a lot more like a great way to waste taxpayer funding to be honest. Certainly the company I work for have "net zero" at the core of what we do and even we don't pay people more per mile than they're entitled to for driving their salary sacrifice car around.
been chewing over how this situation developed in my trust - About 10 years ago they tried to get all business miles users into lease cars - not sure if this was a national push or not, but the premise was that they wanted to make sure staff were able to get to work and move about safely. Maybe it was popular to pull a sickie and say your car wouldn't start, or maybe some staff didn't spec the correct insurance citing business use and there was an issue , but staff that took the lease were paid the prevailing standard rate. Those who declined the lease were put on a lower milage rate. This is what I did, as I didn't want to get into the pension issues associated with salary sacrifice. EV's are being taken up in large numbers now that EVs are being pushed with the much lower BIK than anything else, there is no facility in the terms and condition (yet) to reimburse electric cars differently. My trust have been quite pro active in installing chargers at all sites (about 20 per hospital) staff and patients can uses these for up to 3 hours at a time, which probably means you can pretty much fully fuel your leased, salary sacrifice tesla for nowt.
There is a long term sustainability plan within the NHS - the carbon footprint on the whole NHS is humungous - I don't know, but suspect that an individual trust may be incentivised for reductions in carbon footprint.
This may be only loosely connected to the uptake of EVs on salary sacrifice however, I guess that if all the leased cars are owned by the trust (it owns the lease company) then if the fleet is largely EV it helps their carbon position. However, the major driver is that they are cheaper eg kona EV 275 per month vs Kona petrol 675 per month - add on the the free charging and its a no brainer (pension issues excepted)
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