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Fair mileage rate for people with a car allowance?

Fair mileage rate for people with a car allowance?

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Hi all,

Can anyone suggest a fair mileage rate for people who receive a car allowance?  We presently pay the HMRC rate to staff who occasionally travel, but we are now recruiting people who will be paid a car allowance and travel more extensively.  As the wear and tear on their car is somewhat covered by the car allowance what would be a fair rate to pay them?

Also, what figures if any should be recorded on the P11d?

Thank you.

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By eastangliantaxadvisor
12th Oct 2012 17:49

If you are paying a car allownace, then you will need to include this as part of taxable pay, as it is a packadge to them

 

If it is a pence per mile basis, then you will need to include treat the excess above the standard rate as part of taxable pay.

 

See http://www.hmrc.gov.uk/paye/exb/a-z/m/mileage-expenses.htm

 

 

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By timdudal1000
12th Oct 2012 18:27

mileage rate
if the car allowance covers all running costs (check aa website for running cost guide) then I would look at HMRC rate we use 15p at the moment.
p11d isn't relevant because the allowance is taxed as income, this is instead of declaring on p11d and changing the employees tax code.

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By FreddieZonko
13th Oct 2012 04:08

18p currently most common used

A quick look at my clients shows 18p per mile to be the most common - this is HMRC's advisory rate for fuel where a company car is supplied.

The 18p per mile should go on the P11d unless you have a dispensation.

The car allowance should already be taxed through the monthly payroll.

Remember to let your employees know they can still claim for the difference between the eventual rate you choose and 45p per business mile by a simple letter or if they are in Self Assessment on their Tax Return.

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By SwanseaJack
13th Oct 2012 09:02

P11d

If the employee is being paid a car allowance under PAYE, then the 18p per mile does not have to be reported on the P11D because it is below the FPCS rate.

The employee can claim tax relief for the difference between the 18p paid and the FPCS rate (currently 45p for the first 10,000 miles & 25p per mile above that).

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By Cloudcounter
13th Oct 2012 11:41

18p is not for all cars

The 18p rate is only for one category of car - petrol driven cars from 1401-2000 cc

The rates for other capacities and for other fuels are different

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By Euan MacLennan
13th Oct 2012 12:01

45p/25p

Arthur has spelled it out (albeit with dodgy spelling!) and Jack has reinforced it.

If the car allowance is a flat rate £x per month, it is merely a component of salary and is taxable and NIC-able under PAYE.  The employee can then claim the usual 45p/25p a mile for use of his personal car.  If you, as an employer, pay them less than those rates, the employees can personally claim the difference as an expense of employment.  If, and only if, you pay them more than those rates, which seems unlikely, would you need to disclose the excess on a form P11D.

 

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By Satinthecorner
05th Sep 2013 04:19

How car mileage is paid

I have accepted a new job with a £3,000 car allowance that will be taxed within my salary so this is fine.

 

In addition to this I will get 18 pence per mile again this is fine and I understand I can claim 40% of the difference back at the end of the year.

However, they give you a credit card and you use this to put all your fuel in they then pay for the business miles and deduct the personal miles out of your salary.

So 200 miles – 150 business miles they pay this and the remaining 50 miles they deduct for your salary.

 

My 100 personal miles @ .18 will cost me 5.68 more than if i paid the .18 on the credit card myself and adds up over 15,000 expected miles i think i will be out of pocket.

 Is this normal?

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By yvonnep
18th Feb 2016 22:39

Car Allowance & Fuel

 

One of our members of staff has decided to go with a car allowance of £750/ month instead of a company car.  We are offering 11p / mile for the petrol for business mileage.  - which is in line with HMRC.  I am aware that the difference can be claimed on the persons self assessment.

Is this a fair amount for the company to repay the member of Staff.

She previously had a company car.

 

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By jwlbrace
01st Apr 2016 10:18

bump.... could anyone confirm what the HMRC recommended mileage payment is for an employee with a car allowance as part of their overall salary package?

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By stu2388
22nd Jun 2018 16:02

Can anyone help, I currently get a car allowance which is tax in my salary, and the company pay me 0.11p per business mile, can I claim the difference between this and the 0.45p it states on the Gov web site, if so how.

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By stu2388
22nd Jun 2018 16:02

Can anyone help, I currently get a car allowance which is tax in my salary, and the company pay me 0.11p per business mile, can I claim the difference between this and the 0.45p it states on the Gov web site, if so how.

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