Company Car Business/Private Mileage??

[JohnnyPacket]

Does anyone out there have any detailed information on the definitions of Business against Private mileage in a company car?

I am at loggerheads with my employers with regards to the 'within a 5-mile radius of a permanent or temporary place of employment' ruling by the HMRC.

Any information or pointers would be gratefully accepted, thanks in advance.

[honeybee13]

Hello there.

 

I think it would help if you told us more about what the problem is please.

 

HB

[blondebubbles]

This gives some info - http://www.hmrc.gov.uk/manuals/eimanual/EIM23305.htm

 

Not sure which ruling you are referring to though.

 

Can you give more details on what the issue is?

[JohnnyPacket]

Thanks for the response blondebubbles but I cannot find the information within the link you provided!

Apparently, there is a ruling/law which states that if your first appointment is 'within a 5-mile radius of your permanant place of employment' this travel cannot be included as 'business' mileage (if travelling from home or your place of work). The same is in reverse in that you cannot claim if your last appointment of the day is within the same radius and your next stop is your home (meaning you therfore cannot claim from the last call to home).

If this makes sense is this correct as I cannot find this on the HMRC website!

[blondebubbles]

Never heard of that ruling. Ask your employer to provide you with a link to the HMRC guidance?

[Conniff]

I would also be inclined to ask the boss for a link as well.

 

 

If the car can be used privately, then you are paying tax on it.

Edited January 4, 2015 by Conniff
correct typo

[JohnnyPacket]

Never heard of that ruling. Ask your employer to provide you with a link to the HMRC guidance?

 

Thanks guys, I'll see what they come up with and post the result asap!

[Conniff]

Looked it up and your boss is correct

 

 

As an employer, if you provide company cars or fuel for your employees’ private use, you’ll need to work out the taxable value so you can report this to HM Revenue and Customs (HMRC).

‘Private use’ includes employees’ journeys between home and work, unless they’re travelling to a temporary place of work.

 

 

But then again, could a clients house/business be classed as a temporary place of work. Instead of asking your boss, I think you should ask HMRC to clarify 'temporary'.

 

 

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-enquiries-for-individuals-pensioners-and-employees

Edited January 4, 2015 by Conniff

[caro]

My employers deduct home to work mileage off journeys to other locations if the journey starts from home as they'd make that journey anyway. Hmrc recently told me that was making an assumption that the car would be used to get to work, which was wrong. Therefore employees could claim tax relief as a business expense on their tax return.

 

Not exactly the answer to your question but it may help. Obviously you'd need to keep a record for your return.

[Ethel Street]

My recollection is that it used to be the HMRC rule that if you trvelled direct from home to visit eg a customer then the home to "normal" place of work was deducted from the total mileage, ie only the mileage in excess of your 'standard' home-work mileage could be treated as business mileage. If the employer paid the whole mileage the 'standard' home-work mileage would have been treated as a taxable benefir. However, I also remember reading that HMRC has changed this rule some time ago - maybe 10 years ago - so that now the whole home to customer mileage is treated as busienss mileage. The reason HMRC changed the rule was as caro says, the rule only made logical sense if the employee would otherwsie have used their car to drive to work. HMRC reviewed it. amongst other reasons, because employers in the South East pointed out that many staff commuted by train with season tickets as their normal way of travelling home to work, and on the days when they didn't use their season ticket they got no refund so were still paying for it.

 

Best to ask HMRC, although this page seems to confirm my recollection (despite its rather archaic use of 'commercial traveller'!)

 

http://www.hmrc.gov.uk/manuals/eimanual/EIM32366.htm

[JohnnyPacket]

Thanks Guys for your comments etc.

I now have the correct 'wording' from my employers which is attached.

Does this now make any sense to anyone??

Thanks in anticipation!

[blondebubbles]

You need to ask them where in the HMRC guidance they got this from, ask then for the specific link or part of the guidance that states this.

[Ethel Street]

You need to ask them where in the HMRC guidance they got this from, ask then for the specific link or part of the guidance that states this.

 

The employer isn't statting this is to comply with HMRC rules though. It could be that it's just an employer policy, they don't want to pay for mileage in these circumstances. There's nothing to stop an employer adopting a more restrictive private/business mileage policy than HMRC would permit.

[blondebubbles]

The employer isn't statting this is to comply with HMRC rules though. It could be that it's just an employer policy, they don't want to pay for mileage in these circumstances. There's nothing to stop an employer adopting a more restrictive private/business mileage policy than HMRC would permit.

 

Yes I know but the OP says they were told it was a ruling/law.

[JohnnyPacket]

That is a correct assumption blondebubbles!

My employer states that this is adopted to stay within the rules and guidance of the HMRC to avoid further fines from similar instances of the past.

I will, however, ask them from which guidance they adopt this policy.

[think about it]

Can't speak to the exact rulings but my understanding of this has always been that the first / last journeys were private as your commute to and from work. In all honesty, 5 miles seems quite reasonable, in the instance where we had to travel further than our usual commute to a meeting as a 'first' journey then we would have to subtract the usual commute distance (one-way) from our claim. My daily commute was 84 miles, and so as a rule mileage in excess of 420 a week could be claimed, everything else was down to me (my own fault for getting a job so far away!).