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Claiming Fuel When Employee Driven by Partner

Rules on claiming company incurred fuel expense when employee did not drive miles

Hey all,

So an employee of ours has incurred some business mileage attending a conference. This employee does not drive so was driven there and back by her partner. Now usually I know that the employee would require the correct insurance and could only claim 45p p/mile but what is the correct procedure when it wasn't the employee herself driving?

Any guidance you could give would be much appreciated :)

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09th Oct 2018 17:26

https://www.legislation.gov.uk/ukpga/2003/1/section/229

229 Mileage allowance payments
(1)No liability to income tax arises in respect of approved mileage allowance payments for a vehicle to which this Chapter applies (see section 235).
(2)Mileage allowance payments are amounts, other than passenger payments (see section 233), paid to an employee for expenses related to the employee’s use of such a vehicle for business travel (see section 236(1)).
(3)Mileage allowance payments are approved if, or to the extent that, for a tax year, the total amount of all such payments made to the employee for the kind of vehicle in question does not exceed the approved amount for such payments applicable to that kind of vehicle (see section 230).
(4)Subsection (1) does not apply if—
(a)the employee is a passenger in the vehicle, or
(b)the vehicle is a company vehicle (see section 236(2)).

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09th Oct 2018 17:32

Anonymous123 wrote:

Any guidance you could give would be much appreciated :)

Hey you! The guidance you need is the HMRC "booklet" 490.

;)

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18th Oct 2018 09:48

It seem unfair if 'the employee is a passenger in the vehicle' and cannot therefore claim.

The same cost has been incurred by employee's partner/family

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18th Oct 2018 10:28

My interpretation of 4.a is the situation where you have a "field trip" with more than 1 person in the business going on the same or similar journey, i.e. you can't claim as well as someone else.

I would feel completely comfortable with making that claim.

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18th Oct 2018 11:04

In the circumstances described, even if the employee did the driving, she wouldn't be able to claim mileage for tax purposes, unless attending the conference is a duty of the employment, which is unlikely. The employer can pay mileage if they like, but it's taxable as pay.

However, on a strict reading of the legislation, the claim is also precluded by s 229(4)(a). I am comforted in my opinion by the fact that my view is the complete opposite of whopkinson's. The fact that it doesn't seem fair is irrelevant.

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By Ruddles
to Portia Nina Levin
18th Oct 2018 11:29

I agree - although it does throw up some interesting scenarios. Let's say employee is visiting a client in Anytown (as a duty of employment). Employee's wife is at a loose end and so would like a trip to see the sites of Anytown as she has never been there. Provided employer was happy with that then AMPs should be fine if the employee does all the driving. But what if the employee were to have a boozy lunch with the client so that the wife had to drive the car home? Restrict the claim? A strict interpretation of the legislation would suggest so.

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to Ruddles
18th Oct 2018 11:32

Journey there qualifies. Journey back doesn't. It's just counting miles, after all.

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By Ruddles
to Portia Nina Levin
18th Oct 2018 11:47

But do you agree that that outcome is a rather bizarre one? It's the husband's car, he's fuelled it himself and meets all running costs himself. The absurdity is of course resolved by the fact that no-one is likely to know who drove the car on the way home unless the wife is stopped by a traffic cop, who then submits a report to HMRC advising them to be alert to a spurious mileage claim by the husband.

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to Ruddles
18th Oct 2018 11:54

Exactly... Nobody knows, until you tell them!

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By Ruddles
to Portia Nina Levin
18th Oct 2018 12:50

So, presumably the solution in the OP's case is for the partner to make a reasonable charge to the employee, perhaps something like, I don't know, say 45p per mile with the employee then seeking reimbursement from the employer and/or making a claim under s337. What the partner then does in respect of such payments is another matter.

Subject, of course, to business travel conditions being met

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to Ruddles
18th Oct 2018 13:00

Well, in the OP's situation, the employee should have just shut the fudge up, and claimed mileage, and nobody would be any the wiser! Well, if it constituted business travel, which I still doubt.

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