Taxation on Fuel for company mileage


Q

quietbiker

Hi,
I've recently been shown my employers policy on claiming back mileage
for buisness travel.
I have a company car - 2L SRI Vectra Petrol.
Currently I can claim £0.12 per mile - which I understand is capped by
the IR. In todays 96p/litre for petrol - I'm making a loss for
buisness mileage..

The item of confusing is related to where to claim mileage from, or the
calculations for mileage...
ie.
A....B.....C
I live a "B", work at "C" and have a project based at "A". I leave
home "B" and drive straight to "A".
The current policy states I have to deduct mileage from home to my
normal place of work from the mileage claim to "A"
My employer states that this is due to "Customs and Revenue rules".

However, I've been told varying things by different people... Can
anyone clarify the IR position on this?

Thanks!
Jason
 
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M

Miss L. Toe

Hi,
I've recently been shown my employers policy on claiming back mileage
for buisness travel.
I have a company car - 2L SRI Vectra Petrol.
Currently I can claim £0.12 per mile - which I understand is capped by
the IR. In todays 96p/litre for petrol - I'm making a loss for
buisness mileage..

The item of confusing is related to where to claim mileage from, or the
calculations for mileage...
ie.
A....B.....C
I live a "B", work at "C" and have a project based at "A". I leave
home "B" and drive straight to "A".
The current policy states I have to deduct mileage from home to my
normal place of work from the mileage claim to "A"
My employer states that this is due to "Customs and Revenue rules".

However, I've been told varying things by different people... Can
anyone clarify the IR position on this?

Thanks!
Jason


http://www.hmrc.gov.uk/rates/travel.htm

Is probably a good place to start :)
 
A

Andy Pandy

Hi,
I've recently been shown my employers policy on claiming back mileage
for buisness travel.
I have a company car - 2L SRI Vectra Petrol.
Currently I can claim £0.12 per mile - which I understand is capped by
the IR.
Yes. See:

http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm
In todays 96p/litre for petrol - I'm making a loss for
buisness mileage..
Probably.

The item of confusing is related to where to claim mileage from, or the
calculations for mileage...
ie.
A....B.....C
I live a "B", work at "C" and have a project based at "A". I leave
home "B" and drive straight to "A".
The current policy states I have to deduct mileage from home to my
normal place of work from the mileage claim to "A"
My employer states that this is due to "Customs and Revenue rules".
No it isn't. If C is your permanent workplace and A is genuinely a temporary
workplace (ie you're not there for more than a few months IIRC), and A and C aren't
close together (eg offices in the same town), then the *whole* of the mileage from B
to A is business mileage. Even if it's less than your normal commute. See:

http://www.hmrc.gov.uk/manuals/eimanual/EIM32300.htm

http://www.hmrc.gov.uk/manuals/eimanual/EIM32307.htm

Of course those are IR rules, your company may still insist you deduct commuting
mileage from your expense claim - but if they do you can claim tax relief on the
difference between what the IR allow and what your employer pays.
 
D

Derek ^

Hi,
I've recently been shown my employers policy on claiming back mileage
for buisness travel.
I have a company car - 2L SRI Vectra Petrol.
Currently I can claim £0.12 per mile - which I understand is capped by
the IR. In todays 96p/litre for petrol - I'm making a loss for
buisness mileage..
Have I got this right. The company owns a car which you drive for
business. You buy the petrol and recover the cost from the firm by a
making a 12p per mile claim for business miles, so less than 36 mpg
and you will lose money.

That, IME, is a bit of a non-standard arrangement. I can't see why you
should take a loss if the car's fuel consumption increases for any
reason (say because the sites you are driving to happen to be in
congested locations). It's more common for the firm to pay all the
petrol bills, recover the VAT and you pay them a standard rate for
private mileage.

Do you have the use of the car for private journeys? If so do you
realise that there will be quite a big income tax charge for the
benefit -in -kind, particularly if it's the 206 gm/Km 16v turbo.
The item of confusing is related to where to claim mileage from, or the
calculations for mileage...
ie.
A....B.....C
I live a "B", work at "C" and have a project based at "A". I leave
home "B" and drive straight to "A".
The current policy states I have to deduct mileage from home to my
normal place of work from the mileage claim to "A"
My employer states that this is due to "Customs and Revenue rules".
AFAIAA that is corrrect.
However, I've been told varying things by different people... Can
anyone clarify the IR position on this?
HTH.

DG
 
A

Andy Pandy

Derek ^ said:
AFAIAA that is corrrect.
Nope. People often share lifts into work, or buy a season ticket etc, therefore the
IR allow any home to "temporary" workplace journey as business mileage unless it is
"substantially" the normal commute (ie about the same distance and same direction).
This applies even if it actually costs less than the normal commute, and even if the
normal workplace is passed on the way! See the examples in the links I posted.
 
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Q

quietbiker

Derek said:
Have I got this right. The company owns a car which you drive for
business. You buy the petrol and recover the cost from the firm by a
making a 12p per mile claim for business miles, so less than 36 mpg
and you will lose money.
Yep - its a traditional company car, so I use it for personal mileage
too.
That, IME, is a bit of a non-standard arrangement. I can't see why you
should take a loss if the car's fuel consumption increases for any
reason (say because the sites you are driving to happen to be in
congested locations). It's more common for the firm to pay all the
petrol bills, recover the VAT and you pay them a standard rate for
private mileage.

Do you have the use of the car for private journeys? If so do you
realise that there will be quite a big income tax charge for the
benefit -in -kind, particularly if it's the 206 gm/Km 16v turbo.
Yep -I'm paying about £100 tax/month. However, the car is pretty old
and has done high mileage, but thats another issue.....

Thanks for your comments!
 
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