Soldato
Ah my bad, no. I missed the obvious point there didn't I 
Company took away fuel card, expect me to pay up front.
- Thread starter Nick1881
- Start date
I see what you mean, thank you! I'll be doing some maths and perhaps giving them a call
.A littleAh my bad, no. I missed the obvious point there didn't I
Also worth noting that what you claim is tax relief on the difference rather than the full difference itself to the 45p/25p allowance for private cars.
Soldato
Same happened to me, i originally had a fuel card with private fuel included, but as my privates miles went down and moved up a tax band, that fuel card started to cost me way too much.
The company ran another fuel card in parallel for new started, which meant we still got a car but had to pay back private miles at the end of the month, which was a fair deal. Now we have adopted some global expense system, where we only get to claim back the govt mandated AFR rates per mile. I got a PHEV this year so im actually making a few quid every business trip, assuming the car is charged. Im doing better than many of my diesel driving colleagues, mainly due to the higher cost of fuel and the crazy BIK.
Anyway to cut a long boring story short, people have kicked up a fuss, so the company will make up any difference, and pay out every 6 months, assuming you are not driving like a muppet and getting 25mpg.
The company ran another fuel card in parallel for new started, which meant we still got a car but had to pay back private miles at the end of the month, which was a fair deal. Now we have adopted some global expense system, where we only get to claim back the govt mandated AFR rates per mile. I got a PHEV this year so im actually making a few quid every business trip, assuming the car is charged. Im doing better than many of my diesel driving colleagues, mainly due to the higher cost of fuel and the crazy BIK.
Anyway to cut a long boring story short, people have kicked up a fuss, so the company will make up any difference, and pay out every 6 months, assuming you are not driving like a muppet and getting 25mpg.
Soldato
I assume they have age/mileage conditions on the car allowance scheme? Otherwise you could get a 5+ year old car yourself and claim the full 45/25p?
Have I missed something here? https://www.rac.co.uk/business/news-advice/claiming-vat-on-mileage
You need to think about:
Fuel usage
Tyre wear
Other wear and tear on vehicle (maintenance)
Depreciation of vehicle
Additional servicing at that mileage
Additional cost of business insurance (only a few £s for me, but still)
I'd expect the full 45ppm for first 10k and 25ppm for the remainder. I wouldn't expect to be subsidising their business by paying these costs out of my own pocket.
You need to think about:
Fuel usage
Tyre wear
Other wear and tear on vehicle (maintenance)
Depreciation of vehicle
Additional servicing at that mileage
Additional cost of business insurance (only a few £s for me, but still)
I'd expect the full 45ppm for first 10k and 25ppm for the remainder. I wouldn't expect to be subsidising their business by paying these costs out of my own pocket.
Soldato
At a previous company we had a similar problem where they would only pay advisory fuel rates which left us slightly out of pocket.
What they allowed us to do instead was submit fuel receipts and discount PERSONAL miles at the advisory rate, and this was apparently completely acceptable to the tax man as well.
Worth asking if you can do it this way.
What they allowed us to do instead was submit fuel receipts and discount PERSONAL miles at the advisory rate, and this was apparently completely acceptable to the tax man as well.
Worth asking if you can do it this way.
Associate
That's if you're using your own car for business travel, not if it's a company car.
Soldato
yeah it's kinda what i was thinking, there isnt' a grey area here, this is facts... give them the facts and complain... it's all you can do really.
Soldato
OP I would advise your employer you think there is something wrong with your car as you cannot achieve the manufacturer mileage guidance
Say it needs to go in for repair since its clearly not performing as it should
As a driver its your duty ensure your car is safe, of there is an issue that its burning too much fuel then there must be a reason and you should ensure its roadworthy, burning extra fuel could be the signs of another more serious underlying issue
Other things you can do, they wont make massive differences, but tyre pressures, remove any extra weight, roof racks
Last thing to consider is asking them to agree to average the fuel / miles and allow a recharge at that rate. As its actual cost then HMRC dont have an issue.
So eg you spend £100 on 1500 miles, of which 300 is private. Company repays 1200/1500x£100 as expenses = £80
Would suggest a simple annual sheet, record all business and private, calculate each time you fill up. Maybe agree with company to balance it up quarterly with a one off payment to settle the diff between paid and calculated.
Strictly speaking they should be asking for VAT receipts for proof its been paid in order to be able to reclaim this.
Other angle is if your contract states you will receive a fuel card, as this is deemed a perk then 2 weeks notice would likely fall below the required notice for a change in employment terms, its getting a bit specific in this area though as its a disruptive angel to take.
Actual costs is key since per HMRC "If your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates, you can use your own rates to reflect your situation."
You just need to be able to evidence your MPG achieved in real world driving is different to guidance rates (key bolded)
You cant pay more than guidance without evidence its reasonable, otherwise a taxable benefit accrues, but if you can evidence actual is whats being paid then no taxable benefit accrues
I would suggest the best starting rate is to take last tax year and calculate the rate you achieved (cost per mile) and put it to your employer this is YOUR recovery rate for 2021/2. every employee would need their own rate and you would need to adjust to any significant change in circumstances.
Although this would give a better start point I would still keep a running log per my above suggestion
https://www.gov.uk/guidance/advisory-fuel-rates
Say it needs to go in for repair since its clearly not performing as it should
As a driver its your duty ensure your car is safe, of there is an issue that its burning too much fuel then there must be a reason and you should ensure its roadworthy, burning extra fuel could be the signs of another more serious underlying issue
Other things you can do, they wont make massive differences, but tyre pressures, remove any extra weight, roof racks
Last thing to consider is asking them to agree to average the fuel / miles and allow a recharge at that rate. As its actual cost then HMRC dont have an issue.
So eg you spend £100 on 1500 miles, of which 300 is private. Company repays 1200/1500x£100 as expenses = £80
Would suggest a simple annual sheet, record all business and private, calculate each time you fill up. Maybe agree with company to balance it up quarterly with a one off payment to settle the diff between paid and calculated.
Strictly speaking they should be asking for VAT receipts for proof its been paid in order to be able to reclaim this.
Other angle is if your contract states you will receive a fuel card, as this is deemed a perk then 2 weeks notice would likely fall below the required notice for a change in employment terms, its getting a bit specific in this area though as its a disruptive angel to take.
Actual costs is key since per HMRC "If your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates, you can use your own rates to reflect your situation."
You just need to be able to evidence your MPG achieved in real world driving is different to guidance rates (key bolded)
You cant pay more than guidance without evidence its reasonable, otherwise a taxable benefit accrues, but if you can evidence actual is whats being paid then no taxable benefit accrues
I would suggest the best starting rate is to take last tax year and calculate the rate you achieved (cost per mile) and put it to your employer this is YOUR recovery rate for 2021/2. every employee would need their own rate and you would need to adjust to any significant change in circumstances.
Although this would give a better start point I would still keep a running log per my above suggestion
https://www.gov.uk/guidance/advisory-fuel-rates
The only caveat for all the advice given though is that only the OP knows their situation with their particular employer. Do they really want to be rattling cages over less than £10 per week? Is it a massive company where they are just going to get shrugged off with "it's our policy" type replies?
It is annoying as you shouldn't be out of pocket for work miles but equally cutting off your nose to spite your face may come into play.
I think I'd be tempted to let it run for a few months, stick the numbers in a spreadsheet, see what happens on 1st June regarding the advisory rates. If the numbers look like something you feel warrant raising formally maybe get together with your colleagues and put a formal request to the management to review the situation.
It is annoying as you shouldn't be out of pocket for work miles but equally cutting off your nose to spite your face may come into play.
I think I'd be tempted to let it run for a few months, stick the numbers in a spreadsheet, see what happens on 1st June regarding the advisory rates. If the numbers look like something you feel warrant raising formally maybe get together with your colleagues and put a formal request to the management to review the situation.
£10 per week is £520 per year. That's non-trivial for most people.
Nice one!
Soldato
That's 3x more than I've spent on 'fuel' in a year, so I totally agree. £520 is a lot of money, and being expected to pay this as well as the BIK, I'd opt out of the car scheme regardless, why should you be forced to pay to do your job.
Ah, thank you.
Well, it isn't because the OP won't be working 52 weeks a year and the actual extra cost will probably be less than £10 per week (a figure based on a 1ppm deficit and 1000 miles a week) but I'm not here to split hairs nor trivialise the amount out of pocket. I was just making the point that we don't know the OP's work situation and that its easy to sit behind a keyboard and go in all guns blazing making demands but that might not be suitable.
Again, assuming the OP has an option to opt out. Many employers don't offer an alternative to a compulsory company car.
The situation has arisen due to a combination of car manufacturers plucking fantasy MPG figures out of their rear ends and HMRC not adapting their calculations to take account of the growing difference between manufacturers and real world figures. For comparison five years ago I was making about 1p per mile on my work mileage using the HMRC advisory figures, now I'm in deficit to the same amount.
Soldato
Asking would probably net an accurate answer, but given they are happy to faff around with expenses claims for mileage now, can't see why they wouldn't treat it the same way if you chose to run your own car. I've only ever worked for one place that had no opt out, but that wasn't actually a fixed policy they just never had it challenged before so assumed everyone was happy to take a shiny new car with free fuel, which they were. Now the fuel isn't free if they think they have a fixed policy they might quickly find they do not, as it is a detrimental change to the employee in pay and one could say conditions.
There is no extra faff though. Well, marginal at most! The OP used to put in an expense form for his personal mileage which was then deducted from his pay at 11ppm. Now he puts in a business mileage claim and this is added to his pay at 11ppm. Same process, just the money moves in a different direction.
I think opting out of a company car is a far easier decision to make when it is classed as a perk and is justified because you may need to go to the 'insert_town_here' office once a month. When you are doing 35k or more of business miles per year (let alone personal on top) it gets far more complex. How much would you want to be reimbursed for that kind of wear and tear? You're not going to get a decent lease deal on that sort of mileage and your company isn't going to want you going around in an old banger so do you buy nearly new and effectively write a car off every third year? What would the maintenance costs be? If your car packs up how much will it cost to provide a rental until it gets fixed or replaced?
All of these problems are (rightly) shifted to the employer with a company car. Hence why I'm trying to play devils advocate and saying it is easy to kick off over 1ppm but the bigger picture does need to be considered and put forward in a constructive way.
It is the fault of the HMRC that the OP is out of pocket. They set the rates. If on the 1st June the rate rises to 13ppm (it won't but it might go to 12ppm) all of a sudden the OP is in profit for business miles.
WOW only 11p per mileMy 2.0 petrol giving me 17mpg at the moment in this cold weather i would be stuffed
What about the cost for the car Maintenance do they also expect that out of this 11p per mile ?
Also with company cars are you expected to clean them in the company time or your own time ?
Wow my old 4 litre petrol straight 6 Jeep used to give me 22mpg and I thought that was bad!
Soldato
These rates are called 'advisory' for a reason.
If you keep records of mileage and fuel expenditure that comes out as being higher, then using higher (or lower in those cases) rates is appropriate.
I agree, they are indeed only advisory and the maximum that can be used without been questioned or taxed on. But perhaps the business just wants to keep things simple? Afterall having to work out and verify the exact costs fro each employee is just another burden.
Plus varies so much which drivers. We used to run a fleet of vauxhall astra diesel vans and one driver always did 10+ mpg less than all the rest. We got him to swap vans with another driver to see if it was his van which was an issue - it wanst. He just had a lead right foot and to him the accelerator was either on or off!
After a little talk, his MPG increased to where the rest were.
With your suggestion that employee would be "rewarded" with an 20% more mileage payment than his more gentler fellow employees.
So I can see why a business would just want to keep things simple and just pay the HMRC advisory rates.