Mileage allowance payments and 'at work'

A new travel policy allows employees to claim business miles but not the time associated with them.

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The policy...

Travel to alternative work location (duty) from home If you are required to use your vehicle to travel to an alternative work location (duty);

• and your mileage is greater than the miles to travel to your base - you can claim all mileage over and above your normal commute i.e. you are required to deduct your usual mileage from home to your base from your first journey and from your base to your home on the return journey.

• and your travel time is greater than the time to travel to your base - you can claim the additional time as plain time i.e. you are required to deduct your usual travel time from home to your base from your first journey and from your base to your home on the return journey. All travel time is paid at plain time.

The deduction of time from your first and last journey allows, in some instances, for the emplyee to be able to claim millage but not claim the time as time 'at work'. for example ones usual commutee is 20 miles and takes 40mins. they travel down the motorway to their first duty of the day which also takes 40 mins but covers 40 miles. they are entitled to claim the additional 20 miles outside their usual commute but are not allowed to claim the time. My understanding of HMRC guidance on the matter is that millage allawance can only be paid for business travel only outside of a usual commute. What are the implications or are there any if HMRC discover that business miles are being claimed within the usual commute while the employee is 'off the clock' if you like?

A seperate and maybe not stricly accounting matter would be if the employee is claiming business travel but not being paid and HMRC view this as business travel, so time at work, this could bring said emplyees wage down to under that of NMW. Thoughts?

 

Thanks All      

Replies (14)

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By Tax Dragon
31st Mar 2023 13:10

You're conflating a bunch of disparate concepts and getting muddled conclusions.

If you are, or ask on behalf of, the employer, talk to your accountant. If there isn't one, I recommend you get one.

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Replying to Tax Dragon:
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By HowardBerger
31st Mar 2023 13:27

Can you be specific regarding the disparate concepts please? Its the word 'Bunch' that is confusing me because I only refer to HMRC and the 'Travel Policy' prior to NMW which, as I said, is a side issue. Many Thanks.

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Replying to HowardBerger:
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By Tax Dragon
31st Mar 2023 13:46

Well HMRC and the 'Travel Policy' are already two topics that I would regard as distinct.

Policy first, HMRC second; not t'other way round, as you have it in your head.

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By tom123
31st Mar 2023 13:17

Many employers will pay for travel but expect that to be done in one's own time.

Employers can set their own policies - such as deducting one's usual travel time or cost before making a claim.

Of course employers have to balance the ability to retain staff into these roles when setting these rules.

I don't imagine HMRC would consider whether one was being paid for the time of doing the journey as being relevant to the treatment of the mileage cost.

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By paul.benny
31st Mar 2023 13:34

Regarding NMW, if workers are being paid within about £1/hour of NMW, you *might* have an issue if travel to site is partly unpaid. It's probably worth getting proper legal advice.

(edited to delete duplication of other responses)

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By Hugo Fair
31st Mar 2023 13:37

Careful ... when you start to poke the bear (employer) with a random stick (disparate concepts as TD says), you may not be happy with the consequences.

Employer is entitled to come up with their own policies regarding those two topics (any reimbursement of mileage and any pay for travelling time) ... so long as they then go on to comply with the correct tax treatment of any resultant payments.
The policies you've outlined are unusually complex, but probably more generous than most I've encountered (as Tom says 'many employers .. expect (travel) to be done in one's own time').

You appear to be seeking, in a very muddled way, to find a way of extracting more money from the employer - in which case you should focus on that rather than trying to identify anomalies in their current policies.
FWIW despite what I've said, it is possible that NMW will be in play ... but if so it will be extremely complex and dependent on loads of other factors, so an accountant with whom you can disclose all the details (or possibly ACAS) is where you should start.

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Replying to Hugo Fair:
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By HowardBerger
31st Mar 2023 13:59

Thank you so much. I spoke with ACAS a few weeks back and the advisor agreed that NMW will come into play but the issue was brushed off when raised.

I'm not seeking to extract more money just the time associated with miles the policy allows you to claim. My mind wont allow the two (Time and Claim) to be different. I feel that you should be able to claim the time associated with the miles you are claiming. Is that not standard practice?

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Replying to HowardBerger:
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By paul.benny
31st Mar 2023 14:06

HowardBerger wrote:
..I feel that you should be able to claim the time associated with the miles you are claiming. Is that not standard practice?

No , it's not.
The employer seems to have made a rational policy: it pays for the cost and time for travel to site that is over and above employees' normal commute.

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Replying to paul.benny:
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By HowardBerger
31st Mar 2023 14:08

I will leave it at that then. Thank you and have a lovely weekend.

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Replying to HowardBerger:
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By Hugo Fair
31st Mar 2023 14:08

"Is that not standard practice?"
... No (but then there's really no concept of 'standard practice' in any way that's meaningful to a particular employer who - as mentioned previously - is free to set their own policy in that regard).

As I said be careful what you wish for ... employer could decide to comply with your suggestion (associating payment for time with payment for mileage incurred) - but achieve this by deciding to cease the mileage payments!

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Replying to Hugo Fair:
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By HowardBerger
31st Mar 2023 14:12

It had crossed my mind that might be the solution but then again at least both time and millage would be the same and my mind could rest easy at night lol Thanks.

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Replying to Hugo Fair:
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By Paul Crowley
31st Mar 2023 22:38

I agree
Employers policy is fair
Paid for the EXTRA miles
Paid for the EXTRA time
No idea what OP has a problem with

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John Hextall
By John Hextall
06th Apr 2023 10:44

Many employers nowadays, especially in the care sector, don't even pay for time or mileage between clients which has got to be wrong but they seem to get away with it.

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Replying to John Hextall:
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By tom123
06th Apr 2023 11:02

That is exploitative, isn't it. I feel for the people who have no option but to take on this kind of employment.

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