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Employee paying employer for private van mileage

Employee paying employer for private van mileage

Hi all,

I have a client who is employed but is allowed to keep his van at weekends. He pays his employer 45p a mile, plus VAT., for any private mileage. He said that some months he ends up paying in excess of £300.

Now I understand that by reimbursing the mileage he will avoid a benefit of £3768 (for 2016/17 van and fuel).

My issue is the 45p a mile, plus VAT seems excessive. Now the advisory fuel rates are far lower than this. Can the employer charge what they want to? I assume the employee just has to accept this and have no option of claiming anything back as it's not in the course of employment? Just seems like the employer is doing very well out of the deal....

 

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16th Dec 2017 16:04

Yes - of course he can.

The problem seems to be that the employee has been daft enough to accept these terms. Or to use the van as much as he does.

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17th Dec 2017 12:44

over 550 miles a month?
what does he do with the van?

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By tom123
18th Dec 2017 09:53

Is is a very posh van (ie Mitsubishi L200, fully pimped up)?

My staff pay 15p per mile to avoid the fuel benefit (and only travel a handful of miles - literally).

(They are service engineers so vast majority of mileage is from home to client sites - hence no van benefit in our case)

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avatar
18th Dec 2017 10:07

Accounting-rookie wrote:

I assume the employee... has... no [claim to tax relief]... as it's not in the course of employment?


Agreed.
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