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Mileage allowances given fuel costs

 
#1 Mileage allowances given fuel costs
17/06/2008 12:22

M6 Mondeo Man

Petrol prices have gone up a lot lately. It now costs me £75 to fill my tank when 12 months ago it cost £55. Yet, the rate per mile that many employers reimburse their staff at has remained constant (in my case, at 40p per mile). I do not have a company car yet have to travel for my job. I could use public transport, but the car is far more convenient. By not reimbursing me properly, I am in effect subsidising my employer every time I make a business trip. What would you do in these circumstances?

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#2 RE: Mileage allowances given fuel costs
17/06/2008 12:39

DCF to M6 Mondeo Man (#1)

Most companies pay no more than 40p a mile as that is the limit that HMRC sets at or below which no tax is chargeable.

HMRC really should get round to reviewing it (especially as they are doing so nicely from the increased prices!) but it falls more to them than your employer.

On the other hand, 40p is supposed to reflect the total cost and not just the fuel. If your car doesn't go more than 75/0.40 = 188 miles on a tank then it's a pretty inefficient beast. Mine would do a good 300 miles I would think, leaving a bit of change from the 40p for maintenance and insurance.

Best solution (rather than hold our breath for HMRC) is to drive something that does 50mpg...

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#3 RE: Mileage allowances given fuel costs
17/06/2008 12:46

anon to DCF (#2)

if your employer pays mileage rates less than the Revenue and Customes approved rates you can claim the tax back on the difference (for business travel), you need a form P87

the 40p per mile must include an element of non-fuel cost in theory because you may have to take out car insurance that includes business travel which may cost more

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#4 RE: Mileage allowances given fuel costs
17/06/2008 12:59

M6 Mondeo Man to anon (#3)

I'm thinking that 40p is nowhere near what it should be when you consider:

Petrol (massive increases lately)

DEPRECIATION (10,000 extra miles on a newish car really smacks down the re-sale value)

Cost of new tyres, brakes, and other consumables

Extra cost of having business insurance

Extra cost of more frequent servicing of the car

A share of overheads such as MOT and road tax

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#5 RE: Mileage allowances given fuel costs
17/06/2008 13:31

DCF to M6 Mondeo Man (#4)

Well, if you think the costs don't stack up anymore then suggest the best option is to take a hire car and expense it.

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#6 RE: Mileage allowances given fuel costs
17/06/2008 13:39

M6 Mondeo Man to DCF (#5)

nice idea - thanks!

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