55p per mile

[Josemartinez]

Apologies if this had been discussed elsewhere, I did a search and couldn't find it.

What are people's thoughts on the mileage rate increasing to 55p per mile?

I was always happy with 45p and saw it as a bonus as the fuel didn't cost me that much and the business miles I did were under 1k so had very little impact on depreciation or maintenance. I can see if your doing 10k+ it would be different and would impact maintenance and depreciation. If I was doing 10k+ business miles a year, I would expect a company vehicle.

[AB]

I won't be increasing it, I've just let everyone know they can claim the tax on the difference back.

It's another nail in the small business coffin, that and increased fuel costs on the company owned vehicles, and increase in NMW, and... the list goes on.

[LosingGrip]

AB said:

I won't be increasing it, I've just let everyone know they can claim the tax on the difference back.

It's another nail in the small business coffin, that and increased fuel costs on the company owned vehicles, and increase in NMW, and... the list goes on.

Should your employees be out of pocket though?

[Kuwahara]

AB said:

I won't be increasing it, I've just let everyone know they can claim the tax on the difference back.

It's another nail in the small business coffin, that and increased fuel costs on the company owned vehicles, and increase in NMW, and... the list goes on.

I suspect my employer will do the same (public sector) it’s not set in stone the rate it’s an HMRC advisory level.

[AB]

LosingGrip said:

Should your employees be out of pocket though?

They're not out of pocket on 45p/mile - it's just an effective way of removing money from the horrible, greedy capitalists and putting it into the pockets of the hard working class.

Edit: I think I'm being generous when I say it costs a maximum of 20ppm in fuel alone and nowhere near £3,500 extra to do an additional 10,000 miles in your own car, if you have a car suitable for a job entailing that many miles.

Edited by AB on Thursday 28th May 18:35

[snuffy]

Josemartinez said:

What are people's thoughts on the mileage rate increasing to 55p per mile?

Is that what's happening then? Good if so, but its been 45p since forever.

[FlyingPanda]

AB said:

LosingGrip said:

Should your employees be out of pocket though?

They're not out of pocket on 45p/mile - it's just an effective way of removing money from the horrible, greedy capitalists and putting it into the pockets of the hard working class.

Obviously it depends upon the car and the type of journeys, but something relatively ordinary like my friend's VW Tiguan costs c.60p per mile once you factor everything in (fuel, insurance, RFL, tyres, servicing etc etc) and that's before you factor in depreciation. Assuming you want staff to use their own cars, and don't want them using a 15 year old Fiesta, then I think it's only fair to recompense them appropriately.

EDIT: Fleet News has this table which includes depreciation:

Edited by FlyingPanda on Thursday 28th May 18:48

[AB]

FlyingPanda said:

Obviously it depends upon the car and the type of journeys, but something relatively ordinary like my friend's VW Tiguan costs c.60p per mile once you factor everything in (fuel, insurance, RFL, tyres, servicing etc etc) and that's before you factor in depreciation. Assuming you want staff to use their own cars, and don't want them using a 15 year old Fiesta, then I think it's only fair to recompense them appropriately.

If all their mileage is business then they should have a company owned vehicle. The business should not be contributing to their personal use whatsoever and should not be paying them the cost of running more car than they need to do their job.

[FlyingPanda]

AB said:

FlyingPanda said:

Obviously it depends upon the car and the type of journeys, but something relatively ordinary like my friend's VW Tiguan costs c.60p per mile once you factor everything in (fuel, insurance, RFL, tyres, servicing etc etc) and that's before you factor in depreciation. Assuming you want staff to use their own cars, and don't want them using a 15 year old Fiesta, then I think it's only fair to recompense them appropriately.

If all their mileage is business then they should have a company owned vehicle. The business should not be contributing to their personal use whatsoever and should not be paying them the cost of running more car than they need to do their job.

As an employer, I feel that paying them 55p per mile for usage of up to 10k per year is infinitely preferable to running a fleet of cars. YMMV of course.

[Skyedriver]

55p isn't just for fuel though, it's service intervals, tyres, putting mileage onto the car for resale, depreciation etc.

[KG63]

AB said:

They're not out of pocket on 45p/mile - it's just an effective way of removing money from the horrible, greedy capitalists and putting it into the pockets of the hard working class.

Edit: I think I'm being generous when I say it costs a maximum of 20ppm in fuel alone and nowhere near £3,500 extra to do an additional 10,000 miles in your own car, if you have a car suitable for a job entailing that many miles.

Edited by AB on Thursday 28th May 18:35

You sound like a nice person to work for.
There are many additional costs to running a personal vehicle for business use not least the extra cost of business insurance, increased damage and wear and tear, more frequent servicing, paying to park etc. You may not have noticed but these costs have increased somewhat since the mileage allowance was last raised.
In my case had I not needed a fairly new/reliable car to full-fill my conditions of employment I would have commuted by train and purchase an older car of less value.

The HMRC rate reflects the average cost of running your own vehicle for private use but you seem to have undertaken your own detailed calculations and arrived at a lower figure, would you mind sharing your workings out?

Nice cars in your garage by the way, times must be tough at the top and I can see why you wouldn t want to spend any more money than you absolutely have to on your staff.

Edited by KG63 on Thursday 28th May 19:14

Edited by KG63 on Thursday 28th May 19:17

[Alex Z]

AB said:

They're not out of pocket on 45p/mile - it's just an effective way of removing money from the horrible, greedy capitalists and putting it into the pockets of the hard working class.

Edit: I think I'm being generous when I say it costs a maximum of 20ppm in fuel alone and nowhere near £3,500 extra to do an additional 10,000 miles in your own car, if you have a car suitable for a job entailing that many miles.

Edited by AB on Thursday 28th May 18:35

If you're on a PCP or Lease agreement then the excess mileage can be close to that much.

If you own the vehicle outright then the extra depreciation and service costs are in the same ballpark

[808 Estate]

I do about 350 business miles a month on average. Obviously not enough for a company supplied vehicle. Renting a car isnt worthwhile when you cost in a taxi fare to collect it and another one on return. With the recent fuel cost increases, this is great for me.

[AB]

KG63 said:

You sound like a nice person to work for.

Anyone that knows me, knows that I really am.

I also know from first hand experience, very recently, of allowing an employee to purchase the company pool car (320d) from us at a decent price has come back to bite us financially. 45ppm is more than it was costing us on expensed fuel and all running costs including insurance.

You can quote overall ownership ppm rates including depreciation all you want, but the fact is that if they weren't using their own car for business, they'd be paying the majority of that themselves anyway.

If you're a travelling salesman or engineer or the like doing 40k miles a year business, then you should have a company vehicle, £12k a year untaxed is a nice little earner if not, never mind £13k and your job is more than paying for your personal car.

[noyb1966]

So the 320D cost nothing when it was added to the pool?

[FlyingPanda]

AB said:

KG63 said:

You sound like a nice person to work for.

Anyone that knows me, knows that I really am.

I also know from first hand experience, very recently, of allowing an employee to purchase the company pool car (320d) from us at a decent price has come back to bite us financially. 45ppm is more than it was costing us on expensed fuel and all running costs including insurance.

You can quote overall ownership ppm rates including depreciation all you want, but the fact is that if they weren't using their own car for business, they'd be paying the majority of that themselves anyway.

If you're a travelling salesman or engineer or the like doing 40k miles a year business, then you should have a company vehicle, £12k a year untaxed is a nice little earner if not, never mind £13k and your job is more than paying for your personal car.

The maths of this explanation make very little sense.

Either way though, the message you are sending to your staff for a 10p per mile increase on what I m sure is a pretty low overall spend isn t one I d want to be sending.

[Starfighter]

Also worth noting that the increase to the rate is backdated to April.

[AB]

FlyingPanda said:

The maths of this explanation make very little sense.

Either way though, the message you are sending to your staff for a 10p per mile increase on what I m sure is a pretty low overall spend isn t one I d want to be sending.

The maths is that it costs me less to run a 320d for 40k miles per year as a pool car than £13k all in.

If staff are using their car for say 5k business miles a year then it would make sense to pay them mileage, but then they are paying for their own car for their own personal use which is how it should be.

The milage rate should not pay the full cost of their car and there is nothing wrong with 45ppm as it stands.

I'm pleased they can backdate their tax claim.

In terms of the message, the increase in costs is doing nothing apart from erode our bottom line, why should I personally pay for their personal use of their car?

[5lab]

AB said:

FlyingPanda said:

The maths of this explanation make very little sense.

Either way though, the message you are sending to your staff for a 10p per mile increase on what I m sure is a pretty low overall spend isn t one I d want to be sending.

The maths is that it costs me less to run a 320d for 40k miles per year as a pool car than £13k all in.

If staff are using their car for say 5k business miles a year then it would make sense to pay them mileage, but then they are paying for their own car for their own personal use which is how it should be.

The milage rate should not pay the full cost of their car and there is nothing wrong with 45ppm as it stands.

I'm pleased they can backdate their tax claim.

In terms of the message, the increase in costs is doing nothing apart from erode our bottom line, why should I personally pay for their personal use of their car?

It depends a little on what sort of car the employee would run if not doing business miles. I'm perfectly happy in something like a £1,000 mx5 for personal use, but my employer might not want what that looks like, or how reliable it is, for business transportation. If so, they should cover the cost difference

[blue al]

AB said:

FlyingPanda said:

The maths of this explanation make very little sense.

Either way though, the message you are sending to your staff for a 10p per mile increase on what I m sure is a pretty low overall spend isn t one I d want to be sending.

The maths is that it costs me less to run a 320d for 40k miles per year as a pool car than £13k all in.

If staff are using their car for say 5k business miles a year then it would make sense to pay them mileage, but then they are paying for their own car for their own personal use which is how it should be.

The milage rate should not pay the full cost of their car and there is nothing wrong with 45ppm as it stands.

I'm pleased they can backdate their tax claim.

In terms of the message, the increase in costs is doing nothing apart from erode our bottom line, why should I personally pay for their personal use of their car?

Compelling argument if you haven't put your prices up since 2011, or indeed given yourself a rise, dividends bigger pension contributions or any "directors loans" since 2011....

If this isn't the case it appears that you expect everyone else and in particular your employees to cushion you from 15 years of inflation and whilst they are suffering a bigger tax take and a decline in real incomes, and you are more than happy with that just to protect your own lifestyle.

Even you must realise that buying a car is more expensive than 15 years ago, and have basic grip on depreciation for "normal cars" unless you're paying someone else who understands this difficult maths.

I maybe wide of the mark here but that's how it comes across.