40p mileage claim

thanks Peter - further info
the client trades as property developer thru Ltd company

he bought van in own name but allows a couple of the employees (ex wife and a friend) to use it and charge the petrol on business journeys to the company

I want to debit the petrol cost directly to his loan account which is very substantially in credit and credit him with the business mileage whether or not he was driving at the time

Confused
Not really sure what's going on here.

As far as I'm aware, the whole point of the mileage rates is to reimburse someone for the cost of using their car for business purposes. The rates reflect not only fuel, but running costs of the car.

In principle, you could use someone else's car if it is a relevant business journey, but it does raise a lot of questions.

1) Who paid for the petrol? Was it the employee or the owner of the car? It seems odd that an employee could be paid for something if he has not actually incurred any cost.

2) Presumably, the employee is insured to drive this car. Does the owner's insurance provider know it's being used by someone else for their business journeys.

3) I'm also wondering what the owner of the car is doing with the money he's receiving? If this is happening often, could he be seen as trading, ie car hire?

Hmmm
Surely, if the people using the van are employees anyway, why don't they just claim the business mileage? There would be no tax or NI to pay so long as within the approved rates.

Looking at the legislation, I would say that the employee can only claim for actual business mileage that he or she has undertaken, and therefore cannot claim for mileage undertaken by a 3rd party.

thanks again Peter
that's fine Peter - the employees can claim and then effectively give the benefit of the claim to the guy who a) owns the vehicle and b) pays for petrol and running costs of the vehicle

Found this in IR manuals
in BIM47701 it says this;
''Ownership
It is not necessary for a person who claims mileage rate basis to be the legal owner of the vehicle. All that is necessary is that the taxpayer claiming the expense is paying the costs of running and maintaining the vehicle.

A taxpayer may not use a mileage rate basis if the vehicle is provided by an employer in circumstances giving rise to a benefit. The taxpayer may not use a mileage rate if the vehicle is a pooled vehicle.''

Hope this helps.

thanks Ian
many thanks for that info Ian - I thought intuitively this would be the case but wasn't sure how to get the authoritative guidance