Mileage allowance plus insurance?

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Part time food delivery driver, working for one of the major players, has pay as you go insurance whilst he is delivering.  The insurance is only operative whilst he is actually working and is charged at 80p an hour.  Now I know his standard insurance isn't allowed, as the 45p per mile allowable with HMRC covers all motoring costs, but as this is specific insurance required in order to do the job, I was wondering if this is allowable when claiming mileage?

Replies (23)

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RLI
By lionofludesch
05th Dec 2021 18:04

I could make a good case for the Goods In Transit element, provided that I could isolate it.

A separate policy would be nice.

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By gillybean04
05th Dec 2021 19:03

legerman wrote:

Now I know his standard insurance isn't allowed, as the 45p per mile allowable with HMRC covers all motoring costs, but as this is specific insurance required in order to do the job, I was wondering if this is allowable when claiming mileage?

Unless the policy is offering some type of cover required but not offered by a normal commercial policy, I don't see any argument for it. Paying for a commercial policy monthly (compared to annually) doesn't make a difference. So why would pay by the hour?

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By David Ex
05th Dec 2021 20:42

Without looking at the legislation, I’d have said that the MAP covers everything related to the use of the vehicle. There will always “winners” and “losers” with a flat rate.

Obviously the alternative is to use actual costs. A claim for additional insurance is wanting cake and eat it.

As I say, haven’t read the law which is the only things that matters.

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RLI
By lionofludesch
05th Dec 2021 22:06

Maybe the OP could clarify what exactly is "specific" about this insurance.

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By Paul Crowley
06th Dec 2021 09:21

Is he paying the major player the insurance?
Can he get the gig without paying their insurance?
How else would he book in and start the insurance if it was not the "employer"
My guess is "employee" has inadequate cover, maybe even driving as a named driver on Dad's policy, but certainly not buisness cover

If all drivers must have the policy then maybe allowable?
If employer says your cover inadequate then probably not

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Replying to Paul Crowley:
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By legerman
06th Dec 2021 17:41

Paul Crowley wrote:

Is he paying the major player the insurance?
Can he get the gig without paying their insurance?
How else would he book in and start the insurance if it was not the "employer"
My guess is "employee" has inadequate cover, maybe even driving as a named driver on Dad's policy, but certainly not buisness cover

If all drivers must have the policy then maybe allowable?
If employer says your cover inadequate then probably not

The driver has standard business cover on his normal policy, but hire and reward insurance is required in order to deliver takeaway food. Zego are a company who provide this insurance, and it links to Deliveroo's app and charges from when you start delivering to when you log back out of Deliveroo app. The driver is self employed and can choose when he wants to work.

My apologies to all for not being more specific when I did the post.

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Replying to legerman:
RLI
By lionofludesch
06th Dec 2021 17:53

legerman wrote:

The driver has standard business cover on his normal policy, but hire and reward insurance is required in order to deliver takeaway food.

I vote not allowable. It's road risk insurance - definitely motor.

Though I'm willing to reconsider if you can come up with some loophole in the contract.

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Replying to legerman:
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By gillybean04
06th Dec 2021 21:14

Hire & reward is a standard type of insurance cover for those in a driving profession.

The only thing out of the ordinary is that it's pay hourly. But Zego also offer monthly and annual billing. As far as I can tell, there is no requirement for the client to use Zego and Zego are not even recommended by deliveroo. They're just suggested, as one of several companies, that "a lot of riders use".

It is also billed per hour, not per job/journey. So while you may be able to apportion the cost of the insurance to each job/journey completed in that hour, the same could be done if it was monthly or annual.

I think you've been looking at the rate at which the expenditure is billed (to answer whether it's allowable), when you should have been considering the nature of the expenditure. If I'm wrong, please say - I much prefer facts over presumptions.

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Replying to gillybean04:
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By legerman
07th Dec 2021 13:36

gillybean04 wrote:

Hire & reward is a standard type of insurance cover for those in a driving profession.

I think you've been looking at the rate at which the expenditure is billed (to answer whether it's allowable), when you should have been considering the nature of the expenditure. If I'm wrong, please say - I much prefer facts over presumptions.

Not so much the way it's billed but as an additional amount to pay over a standard driving policy. I agree with your rationale but I would have been happy to allow it had it been permissable. Thanks to all who replied

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RLI
By lionofludesch
06th Dec 2021 09:27

What risk is being insured ?

Road risks ?

Or Goods ?

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Replying to lionofludesch:
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By legerman
06th Dec 2021 17:50

lionofludesch wrote:

What risk is being insured ?

Road risks ?

Or Goods ?

Sorry Lion, only just got back to the thread. It's hire and reward insurance specifically required in order to deliver takeaway food. However it's marred slightly that it's both of the above, not just goods in transit. However the (self employed) driver must have standard insurance as well, which doesn't cover him for hire and reward.

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By Mr_awol
06th Dec 2021 11:43

Working for "one of the major players". Which one? Surely that's hardly condidential and whilst it wont necessarily enlighten anyone to provide an answer, you never know - it could (if another poster has lots of these types of clients).

Is cover arranged by them or via a third party like https://www.zego.com/car/ ? What cover is being provided?

I would say that something like Zego is absolutely not allowable in addition to mileage as it's just another way of buying insurance. On the other hand, if the client has full business cover, and the top-up is provided by the 'major player' as some sort of backhander/admin fee, or to cover public liability/legal expenses etc not included in the main business policy then it might not really be MRE in which case there could well be an argument for including it.

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Replying to Mr_awol:
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By Tax Dragon
06th Dec 2021 12:01

Mr_awol wrote:

if the client has full business cover, and the top-up is... to cover public liability/legal expenses etc not included in the main business policy then it might not really be MRE in which case there could well be an argument for including it.

s94D(6) ITTOIA 2005 wrote:

In this section “qualifying expenditure”, in relation to a vehicle, means any expenditure incurred in respect of the acquisition, ownership, hire, leasing or use of the vehicle, other than incidental expenses incurred in connection with a particular journey.

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Replying to Tax Dragon:
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By Mr_awol
06th Dec 2021 12:49

Yeah. I suppose in my head I meant some sort of indemnity against the brand (legal cover etc) unconnected to the driving or acquisition of the car - but now I'm struggling to think of any examples.

At a push, perhaps, the Public Liability aspect - not in terms of crashing into people, but more in terms of having Covid and coughing all over peoples' dinners, breaking the doorbell/gate/etc or claims for missing food/deliveries.

The point being (put rather more clearly) if the client has sufficient motor cover in place and this is non-motor cover (whatever that may be) then there could well be an argument for including it. Other than that though - if it's just car insurance I'm firmly in the 'no' camp.

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Replying to Mr_awol:
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By legerman
06th Dec 2021 17:55

Mr_awol wrote:

Working for "one of the major players". Which one? Surely that's hardly condidential and whilst it wont necessarily enlighten anyone to provide an answer, you never know - it could (if another poster has lots of these types of clients).

Is cover arranged by them or via a third party like https://www.zego.com/car/ ? What cover is being provided?

I would say that something like Zego is absolutely not allowable in addition to mileage as it's just another way of buying insurance. On the other hand, if the client has full business cover, and the top-up is provided by the 'major player' as some sort of backhander/admin fee, or to cover public liability/legal expenses etc not included in the main business policy then it might not really be MRE in which case there could well be an argument for including it.

I wasn't sure whether to mention but major player is Deliveroo and the insurer is Zego. Zego offer a top up policy that covers you only only whilst delivering as well as a standard policy that covers you all the time. The driver is self employed, which I forgot to mention.

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Replying to legerman:
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By Mr_awol
07th Dec 2021 11:44

OK that helps.

I would say it is not allowable. My reasoning is that it's just insurance - to cover the vehicle when it is being driven for food delivery/hire and reward. It may, in some cases, also include Social Domestic Commuting and Pleasure (bog standard motor insurance).

If it were akin to a GIT policy, or even better, related to the driver's actions unrelated to driving, then maybe - as per my reply to TD above im struggling to think of decent examples of insurances that WOULD be allowable but they'd need to be different to a motor policy.

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Replying to Mr_awol:
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By Hugo Fair
07th Dec 2021 12:39

"struggling to think of decent examples of insurances that WOULD be allowable"

I'm sure it's not case here (and don't know if it even exists) but IF the policy was:
a) unrelated to the driving part of the job; and
b) covered accidental damage to property (such as after dismounting, tripping on front-door step and smashing the delivery through glass panel on front-door)?

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Replying to Hugo Fair:
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By Mr_awol
07th Dec 2021 16:08

Hugo Fair wrote:

"struggling to think of decent examples of insurances that WOULD be allowable"

I'm sure it's not case here (and don't know if it even exists) but IF the policy was:
a) unrelated to the driving part of the job; and
b) covered accidental damage to property (such as after dismounting, tripping on front-door step and smashing the delivery through glass panel on front-door)?

Well yes - and they are pretty much exactly the types of examples i came up with, at a push, when responding to TD earlier. However I'm not wholly convinced that such a policy exists, so in my current response I'm still struggling to come up with (realistic and/or feasible) examples relevant to a takeaway delivery driver. There are many for other sectors which would make better examples of course.

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By SXGuy
06th Dec 2021 14:22

I'd say having tyres on the vehicle is specific and required to do the job. Doesn't make it an allowable expense either.

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Replying to SXGuy:
RLI
By lionofludesch
06th Dec 2021 15:32

SXGuy wrote:

I'd say having tyres on the vehicle is specific and required to do the job. Doesn't make it an allowable expense either.

It's a ridiculous example. Notleast because no-one's suggesting that.

Meanwhile, I'm still waiting for a reply to the key point. What risk is being insured?

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By legerman
06th Dec 2021 17:59

I've replied to Mr Awol but the reply is currently held for review by Sift, not sure why?

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By Michael Davies
08th Dec 2021 10:18

Hmm.Self employed Deliveroo driver.I had forgotten about this summer’s Court of Appeal ruling.Expect HMRC to do something about that.So the driver is using 45 p a mile ? Time to switch to actual expenses ?
Round by me , I saw diesel priced at £1.54 a litre;I haven’t done the maths but surely no self employed worker would claim the old IRAM rates ? A few years ago a mate of mine (an employee)using his own X5 worked out it was costing him over £1 a mile business mileage,yet our firm were only reimbursing the 45p a mile.
Funny story driving along the A4 between Hungerford and Bath ish a few years ago (it was very windy so kept off the M4);when I spotted diesel priced at £1 a litre.Piled into the garage to fill up;then I realised the garage had been closed for about twenty years and they had just left the pricing sign up.It is very quiet on that stretch.

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Replying to Michael Davies:
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By Tomazaan
08th Dec 2021 11:55

This is totally off topic but I used to live near Bath. When driving home from London I would always go along the A4 between Hungerford and home rather than the M4. The A4 there is a wonderful road and just thinking about it makes me feel warm and happy. Thank you for mentioning it.

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