Mileage claims and expenses

[Mat B]

Hi can anyone give some advice of what can be claimed in mileage and expenses for a personal car please.

I'm looking to find out rate (40p a mile)

And how many miles you can claim this up to. So is there a cut off at a certain point.

The basic jist is I have taken a new role in a company and have an employee who's been putting in mileage expenses for 400 to £500 plus every two weeks and has just been cashing a cheque it. Now in my eyes this surely can't be possible and want to see what can be claimed and if its incorrect how do I go about sorting it so the company won't be liable.

Thanks in advance

 

[moonloops]

HMRC approved rates:

From 2011-12 First 10,000 business miles in the tax year 45p Each business mile over 10,000 in the tax year 25p

 

[Bobby Dazzler]

Take a look at these links. You need to see the company policy on expenses, travel and subsistence if you haven't already.

HM Revenue & Customs: Tax relief for travel and subsistence

HM Revenue & Customs: Travel - mileage and fuel allowances

 

[Dieselman]

It depends on what the Company agreement is? A Company can pay whatever it likes to it's staff, but anything above the HMRC rate is tax payable.

Is the £400-£500 just for fuel or the complete charge?

£500 at £0.25 = 2000 miles in two weeks. Is that likely?

 

[Mat B]

I will have to route through contract or policies and see what the wording is.
I've asked to see the mileage forms that each employee has to fill in and send to the office. But I honestly do not think its possible as he also has use of one of the company cars and fuel card. So I've kind of just flagged up another thing I've totally Over looked. I should cross reference the fuel card expenses for him too.

 

[Dieselman]

Why would he be using his own car for business if he has access to a company car as well?

IF he has covered under 10,000 business miles where he is recovering from the company, the rate would be £0.45 so £500 = 1111 miles in two weeks.

 

[Spinal]

We just give HRMC rates, or 45 p per mile up to 10K miles, then 25p per mile thereafter.

It's not unusual for me to have £400-500 in mileage claims in one week, as I drive from London to Birmingham each morning when working at that datacenter.

It's all down to where he works. Do you not request receipts? We need to submit some fuel receipts with each mileage claim, which is entertaining for me as if I drive the smart it's 2 tanks a week... if it's the probe, it's 5 tanks a week

M.

 

[Rory]

We just give HRMC rates, or 45 p per mile up to 10K miles, then 25p per mile thereafter.

We get the same, but I think it's fairly unusual for people who in a previous era would have had a company car.

Generally there's a monthly allowance to cover fixed costs and then basically just petrol money - 15-20p/mile. Some rebate from HMRC is available too.

 

[Mat B]

Thanks for all the info.
So from I can work out he would of gone passed his 10k miles from April 2013 to August 2013. £5129.78 claimed In total in those months alone. Then the expenses go up even higher from there on in.
I can't access my drop box to check all the fuel card expenses. The last two months are £656 (company car and his!). Company cars are a mix of either tdv6 discoveries, Astra diesel vans, vauxhall vivaro 2.0l diesel vans and his which is a 2.2l Honda Diesel.

He's is my operations manager so does travel when required. But most of it is local and perhaps once every fortnight to a client which could be a good few hours away.

I don't have a problem with what has been claimed I just do not want any come backs from the revenue my way

 

[markjay]

45p per mile (for the first 10k) is the maximum an employer can pay without attracting tax.

It is not a mandatory figure.

Employers can choose to pay less - say 25p per mile - or pay more and then pay tax on the difference.

 

[guydewdney]

he needs to work for the EA

Inside the Environment Agency - Welcome to Inside the Environment Agency

 

[Palfrem]

What is your company policy on business mileage?

 

[Spinal]

45p per mile (for the first 10k) is the maximum an employer can pay without attracting tax.

It is not a mandatory figure.

Employers can choose to pay less - say 25p per mile - or pay more and then pay tax on the difference.

Indeed - and an employee can claim the difference from HRMC if the employer pays less (I believe, never had to do this).

In my previous job, we got a car allowance of a £5k a year (taxable) - this then lowered the mileage being paid to 25p per mile as your personal car was effectively subsidized by the employer.

M.

 

[Mat B]

What is your company policy on business mileage?

It seems there has never been a written and signed policy in place.
So it was assumed all mileage was charged at 45p a mile.

 

[st13phil]

So from I can work out he would of gone passed his 10k miles from April 2013 to August 2013. £5129.78 claimed In total in those months alone. Then the expenses go up even higher from there on in.

It seems there has never been a written and signed policy in place.
So it was assumed all mileage was charged at 45p a mile.

Sounds like your employee will need to declare the payments made above 25p/mile rate for miles 10,001 and up when he completes his tax return at the end of the year...

 

[Spinal]

Sounds like your employee will need to declare the payments made above 25p/mile rate for miles 10,001 and up when he completes his tax return at the end of the year...

Wouldn't the employer declare those if they are using PAYEE? (honest question, I'm curious myself!)

M.

 

[st13phil]

AFAIK, under the HMRC approved mileage scheme the employer doesn't have to report anything if the payments made are under the approved amount, i.e. 45p/mile for the first 10k, and 25p/mile thereafter. Once the payments made are above that level then the excess amount has to be reported on a P11D which the employee then has to declare.

Warning: I'm not a tax expert, I'm just a bloke on t'interweb...

 

[Beetnik]

Complicated if you pay more than 45p/mile as you have to deduct NIC on the extra.

Employee should be completing a log: Start point/end point/start mileage/end mileage/mileage claimed.

HMRC once went through a colleagues claim item by item using MS Autoroute to check it. He was over-egging it and got clobbered.

No evidence - no pay!

Details here; HM Revenue & Customs: Mileage expenses for business travel in employees? own vehicles

 

[Rory]

HMRC once went through a colleagues claim item by item using MS Autoroute to check it. He was over-egging it and got clobbered.

Hmm...I always go the long way round!