Travel Allowance - What rate to use to claim back (private travel)?

UK Discussion in 'General Accountancy Discussion' started by AlexSS, Apr 20, 2017.

  1. AlexSS


    Apr 20, 2017
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    I am wondering if someone can help me. I am just taking over a finance function and I am trying to verify rates used to claim back fuel.

    My new company has recently moved depots and we have an employee that uses his own car to travel in to work. It has been agreed that he is reimbursed for the fuel used for this journey as a perk to move depots. It's been agreed that claims would be based on mileage. I am aware this is a benefit in kind so he will get taxed on it but the Question is ...........Does he claim @ 45p a mile or 11p a mile? as this is not business fuel allowance I am a little unsure what is the right rate.

    I am also now questioning whether it should be just taxed....per hmrc due to last sub heading on private travel.....
    AlexSS, Apr 20, 2017
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  2. AlexSS

    Becky Administrator

    Aug 26, 2011
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    What the company pays him is up to the company, but you are right that it will be taxable because it is ordinary commuting. The 45p rate is a flat rate that is usually used when an employee is using their own car (to reflect both fuel and wear & tear to the vehicle) and the lower rate tends to be used when an employee is just being reimbursed for fuel (eg if using a company car). In short, you can pay him whatever you like as long as it is treated as taxable income, so it depends on what has been agreed with the employee.
    Becky, Apr 21, 2017
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