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Post by Bob Sacamano v2.0 on Mar 28, 2019 11:13:15 GMT
If I've got an employee using their own car for business we pay them 45p a mile (25p over 10k a year).
If they have company supplied car inc maintenance but no fuel we pay them 11p per mile for a 2.0 diesel.
If we pay them a car allowance - say £350 a month, how much mileage would we pay them - 11p a mile wouldn't cover any wear and tear resulting from company use, tyres, servicing etc. So what would you suggest paying them without them falling foul of HMRC?
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Post by PetrolEd on Mar 28, 2019 11:32:06 GMT
Is the £250 a month not supposed to cover the cost of a car and maintenance therefore you're back at 11p a mile.
I don't know what your employees expectations are on a car but if they are happy to run around in a new Astra then £350 should cover it, if they're more interested in running around in a used Boxster then obviously it wouldn't but then you gets your money and you make your choice.
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Post by Bob Sacamano v2.0 on Mar 28, 2019 11:46:15 GMT
Is the £250 a month not supposed to cover the cost of a car and maintenance therefore you're back at 11p a mile. That was my thought but wondered if I was missing something and wanted to cover all the bases. |
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Post by Martin on Mar 28, 2019 12:42:58 GMT
Is the £250 a month not supposed to cover the cost of a car and maintenance therefore you're back at 11p a mile. That was my thought but wondered if I was missing something and wanted to cover all the bases. That’s how it usually works, allowance covers buying/running the car and you use the approved mileage rates depending on the size of engine and fuel type. That’s currently 14p for the Golf and 21p for the BMW. The employee can then claim back the difference between what they’re paid per mile and the tax mans allowance on their tax return. I think that’s 45p per mile for the first 10k miles and 25p for miles over 10k. I should get circa £2k adjusted back on my tax code this year. |
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Post by Tim on Mar 28, 2019 13:02:23 GMT
For users getting the allowance we simply pay them 45p/mile.
Overly generous by the looks of it but in reality they only appear to do a couple of hundred miles a month at most so its not making a difference for the 3 people it affects.
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Post by Bob Sacamano v2.0 on Mar 28, 2019 13:32:04 GMT
Thanks for the input, much appreciated.
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Post by ChrisM on Mar 28, 2019 13:41:40 GMT
That was my thought but wondered if I was missing something and wanted to cover all the bases. That’s how it usually works, allowance covers buying/running the car and you use the approved mileage rates depending on the size of engine and fuel type. That’s currently 14p for the Golf and 21p for the BMW. The employee can then claim back the difference between what they’re paid per mile and the tax mans allowance on their tax return. I think that’s 45p per mile for the first 10k miles and 25p for miles over 10k. I should get circa £2k adjusted back on my tax code this year. That's how I remember it working back in the 1990's when I received a car user allowance, and our mileage rates were then generally only to cover the fuel costs. It's how I managed to afford to buy my Rover, using most of the monthly allowance for the finance payments (the interest on which was eligible for tax relief). |
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