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Reimbursement for business milage - confused??


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I know that HMRC advise 40p per mile for business mileage when using your own car, but is there an actual minimum that an employer can reimburse?

My employer will only reimburse a tiny amount and I'm pretty sure it doesnt even cover the cost of my fuel, surely this isnt right?

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We dont have a manual at all, but my contract in a sub paragraph under pay states:

'In addition to your renumeration, you will be reimbursed all reasonable expenses, properly, wholly and exclusively incurred by you and authorised by a Director in the discharge of your duties under this contract upon production of receipts or other evidence for them as the Company may reasonably require.'

There is no other section referring to mileage in any way.

Seperate to my contract is an expenses sheet that I have been given which states 12p a mile.

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An employer can reimburse whatever they want, including nothing. The HMRC is not guidance in the sense you think it is - it is a set amount which relates to offsetting (claiming tax back, simply) or taxable benfit on mileage.

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I am a barrister specialising in employment law, and only represent employees. My advice on employment issues is advice - not legal opinion - and is based only on the facts you provide. If you want an accurate assessment of your case and prospects, you should get legal opinion from a lawyer - not a public forum. Anything I tell you is for guidance only, and is based on my experience of the law in the context of what details you provide.

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But if you are only getting 12p per mile you can claim the tax allowance for the difference - speak to HMRC and they will tell you what to do.

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I am a barrister specialising in employment law, and only represent employees. My advice on employment issues is advice - not legal opinion - and is based only on the facts you provide. If you want an accurate assessment of your case and prospects, you should get legal opinion from a lawyer - not a public forum. Anything I tell you is for guidance only, and is based on my experience of the law in the context of what details you provide.

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I cant remember the form number but you can claim the difference between the HMRC and you employer from the HMRC. I couple of people I know have just done exactly the same thing. You can also go back either 5 or 6 years I believe so if you been employed by them for a while you could have a nice payout coming your way :)

 

Yorky

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What you need is a P87 Form - available HERE

 

Calculate your mileage for any completed tax year (you can reclaim up to six years previous relief) either from records you have kept for the year, or from back calculating from the amounts paid by your employer. The Form is self-explanatory - you enter the mileage, multiply this by 40p and that gives you a value. The next section is for details of what your employer has paid you towards the cost of business mileage, then A-B to give a total claim value. There are also other sections where other business expenses can be detailed (if any) and you then send the Form to your employer's tax office. If the figures are not queried then HMRC will allow tax relief at your personal rate against the value of the claim - resulting in a cheque for any overpayment of tax and a likely recoding to take account of the mileage likely to be incurred in the coming tax year. If the amount claimed is for relief on more than £2500 of expenses, then this cannot be done via the P87 but has to be claimed through self-assessment.

 

My employer used to pay me 30p a mile, and I used to reckon on HMRC giving me back around £150 for the difference based on an annual mileage of about 9,000 miles. You will only get relief based on 40p per mile for the first 10,000 miles and thereafter the relief is based on 25p per mile. You can also not receive any greater amount than you have paid in tax that year, so this catches my wife out, who does around 8,000 miles per year and gets hardly anything from her employer for using her own car (care work), but because she is part time and doesn't pay much tax on her wages she does not receive anywhere near the amount back from HMRC that she actually spends on fuel!

 

There you go - clear as mud. If you get stuck then just shout!

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The other thing you may want to do is actually contact HMRC about your National Minimum Wage - if your mileage expenses are reducing your pay below the NMW rate, your employer may be committing an offence by not paying you sufficient.

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