Mileage payment to employees
A client is paying a mileage allowance (45p a mile within the FPCS) to an employee whoh as to travel to his fixed place work from out of town. This employee is the only employee who is not a family member and only he receives this payment.
To me this is paying him for his commuting travel and therefore taxable as a benefit. My client insists that his employment solicitor says there has been a recent case (I'm awaiting further informaton on this) and that a P11D dispensation can be made for this mileage to be paid tax free.
Can anyone shed further light on this?
Thank you.
I suspect that... 1 thanks
... the recent case the solicitor may be thinking of is Reed Employment. It's an entirely different point and actually went the other way. I agree with the others.
Solicitor!
I would advise your client to ask his solicitor for more information. He may be well advised to also check the other advice given by this solicitor.
It is taxable 1 thanks
If he is travelling to his fixed place of work from home, then the fixed place of work is without doubt a Permanent Workplace. This means the journey is Ordinary Commuting, and no relief is allowable for the costs of the journey. Therefore the mileage payments should be paid via payroll, and subject to PAYE & NIC.
There has not, to my knowledge, been a recent case that overturns this fundamental principle. Sounds like a "man in the pub told me" story, to me.