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Mileage Rate 45p

Mileage Rate 45p

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Hi,

 

One of directors claims 25p per mile for business mileage (he exceeded 10,000 miles in the tax year). He also is a director of a 2nd company which is under one group.

Since he has not exceeded 10,000 miles in the 2nd company, is he allowed to claim 45p per mile from the 2nd company? Or is the allowance per person no matter what company?

 

Thanks

Replies (25)

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By RetiredTax
21st Dec 2021 14:06

Have a look at HMRC Booklet 480
Chp. 16 or search "AMAP" in their Employment Income Manual

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By MattS
21st Dec 2021 14:20

I believe the 10,000 is a personal limit. Anything paid over the authorized rates should be included on the P11d

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Replying to MattS:
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By RetiredTax
21st Dec 2021 14:27

I think if the worker has (say) 2 different employers in the year (s)he will get 2 X the 10000. -- so not a personal limit?

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Replying to RetiredTax:
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By Hugo Fair
21st Dec 2021 15:33

As per your earlier suggestion ... https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim31280

"Where an employee uses their own vehicle in the course of more than one employment during a single tax year, each employment is treated separately (so each has its own10,000 mile higher rate limit for cars and vans, see EIM31240)."

BUT ...

"This rule is modified if the employments are associated. The business mileage from all associated employments is added together when working out whether the 10,000 mile limit has been reached (see example at EIM31380)."

[The link at the beginning of this includes definition of 'associated employments'].

NOTE: you can't use two different vehicles to gain another set of 'allowed mileage' - unless the vehicles are of different types (e.g. car and van).

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Replying to RetiredTax:
RLI
By lionofludesch
22nd Dec 2021 07:34

RetiredTax wrote:

I think if the worker has (say) 2 different employers in the year (s)he will get 2 X the 10000. -- so not a personal limit?

How would one employer know what the other was paying?

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Replying to lionofludesch:
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By RetiredTax
22nd Dec 2021 10:10

This is a bit early for me, -- but if they are totally separate employers, why would they need to know what the other had/is paying?

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Replying to RetiredTax:
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By lionofludesch
22nd Dec 2021 10:17

RetiredTax wrote:

This is a bit early for me, -- but if they are totally separate employers, why would they need to know what the other had/is paying?

They would if they had to share the 10000 mile 45p allowance.

That's my point. Such a requirement would be unworkable.

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By TURNER89
21st Dec 2021 15:13

Section 16.6 on the HMRC Booklet 480 clarifies.
If the businesses are associated, in which they are then all business travel would be treated as though was through a single employment.

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By David Ex
21st Dec 2021 18:00

joanna1 wrote:

Since he has not exceeded 10,000 miles in the 2nd company, is he allowed to claim 45p per mile from the 2nd company?

You can only claim mileage from the company on whose business you have been travelling. Or maybe I have misunderstood what you mean.

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RLI
By lionofludesch
22nd Dec 2021 07:36

Can you clarify whether the director has claimed only 25p for all the 10000+ miles he travelled on the first company's business?

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Replying to lionofludesch:
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By Hugo Fair
22nd Dec 2021 11:39

That to me is the interesting point (which I decided not to raise given TD's dislike of people responding to unasked questions) ... but will OP respond?

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Replying to Hugo Fair:
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By Tax Dragon
22nd Dec 2021 12:04

Hugo Fair wrote:

... but will OP respond?

Doubt it, it's a pretty insulting question given the question OP asked.

But when did I say I dislike people responding to unasked questions? Be pretty hypocritical of me, given it's something I do in here.

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Replying to Tax Dragon:
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By lionofludesch
22nd Dec 2021 12:30

Tax Dragon wrote:

Doubt it, it's a pretty insulting question given the question OP asked.

Just checking. What's insulting about that ? If the director indeed has only claimed 25p a mile from the first company, I don't understand why any doubt arose about claiming 45p - up to a limit of 10000 miles - from the second company.

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Replying to lionofludesch:
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By Tax Dragon
22nd Dec 2021 12:44

So given the answer to that question is so obvious, what made you think that was the question being asked? (The OP as I read it was "does it matter that the two companies are in the same group?")

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Replying to Tax Dragon:
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By lionofludesch
22nd Dec 2021 13:06

Tax Dragon wrote:

So given the answer to that question is so obvious, what made you think that was the question being asked? (The OP as I read it was "does it matter that the two companies are in the same group?")

Dunno. That's why I asked for clarification.

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Replying to lionofludesch:
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By Tax Dragon
22nd Dec 2021 13:39

Even though all the information the OP could need had already been provided?

(OP might need to do a little bit of work still, following Hugo's first link and looking up some definitions. But - ironically (?) - that's not what you are offering to help with.)

Anyway, as ever, fun chatting. But I have things to do.

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By joanna1
22nd Dec 2021 16:09

Director used up 45p allowance in the 1st company, claims 25p from both companies. However, in the 2nd company he does not incur many business trips so will not exceed 10,000 miles per tax year.
Thank you very much for all your replies. I really appreciate all of your guidance.

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By David Gordon FCCA
22nd Dec 2021 17:06

Sorry
maybe I am missing a point.
I was under the impression that the limits applied to the vehicle.
and
if the second vehicle is deemed a commercial vehicle then apportioned business costs are allowed per se.
and business miles are as related to a company.
I had a musical client now retired, Gawd bless'im, who was to cars what Dracula was to virgins. he could cheerfully go through three or four cars in a year, with an average annual mileage around 40,000, HMRC accepted the statement on the returns
"XXXXX miles over two/three cars."

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Replying to David Gordon FCCA:
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By Tax Dragon
22nd Dec 2021 17:12

Was tuneful Dracula self-employed?

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Replying to Tax Dragon:
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By Hugo Fair
22nd Dec 2021 17:30

Are you suggesting re-visiting https://www.accountingweb.co.uk/any-answers/is-10000-miles-45p-limit-per... ?
But a good point that seems to have been lost in the meandering responses so far.

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Replying to Hugo Fair:
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By Tax Dragon
22nd Dec 2021 17:58

Well we know OP's case is employment - group companies tells you that. But musicians are often self-employed, I believe.

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Replying to David Gordon FCCA:
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By lionofludesch
22nd Dec 2021 17:14

David Gordon FCCA wrote:

Sorry
maybe I am missing a point.
I was under the impression that the limits applied to the vehicle.

It would be a great tax planning wheeze.

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Replying to David Gordon FCCA:
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By Hugo Fair
22nd Dec 2021 17:15

"I was under the impression that the limits applied to the vehicle" ... point duly missed (see references within my earlier response above).

Your musical client was extremely lucky (if by inference he was claiming 45p/mile for the whole 40,000 miles based on an averaged threshold per car) ... but then we all know examples where, particularly in the days of paper returns, HMRC failed to apply a microscope to every entry in every form!

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Replying to Hugo Fair:
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By Tax Dragon
22nd Dec 2021 17:29

Just to clarify something you said earlier...

EIM31240 wrote:

Business mileage and mileage allowance payments (MAPs) for all vehicles within the same kind are merged as though they related to a single vehicle, but separate calculations are made for each different kind of vehicle.

Which is what you said. But you used the example of cars and vans as different 'kinds'. That's often true, but for this purpose it's not. The 'kinds' relate solely to the three rates of payment, ie:
1. cars and vans
2. motor cycles
3. cycles.

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Replying to Tax Dragon:
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By Hugo Fair
22nd Dec 2021 17:33

Thanks.
From pedant (me) to sloppy reading (me again) - it's a slippery slope to Christmas!

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