The HR Forum

Expenses and Mileage claims

Hi all, 

I have recently started a new role whereby I work from home 3 days a week and out and about 2 days per week (They haven't yet given me a contract so nothing is detailed out at this point). I have been told the following; 

Mileage is paid at 20p per mile for Managers and we don’t pay for the first 20 miles for the 10 miles each way for home to work radius, so if you travel a total of 50 miles, the miles to claim would be 30.

I am aware that on the Gov website it states: 

Type of vehicleFirst 10,000 milesAbove 10,000 miles
Cars and vans45p (40p before 2011 to 2012)25p

I have searched around and come across applicable websites which say that employers don't have to pay the 45p rate and can pay lower. Is this the case or should the mileage be paid at the rate stated on the Gov website? I haven't needed to deal with mileage expenses until now.

Also am I correct that if I don't have a fixed work address, the radius would apply, but if I had a fixed work address I wouldn't be able to claim mileage to and from that fixed place but could claim mileage to all other locations without the application of the radius?

I am working for a Social Enterprise, so I am aware that the budgets are extremely tight and I don't want to rock the boat before finding out the correct information. 

Thanks in advance, 

Emily 

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Replies

  • Hi Emily

    That's a bit mean!  You are correct that they do not have to pay you the full £0.45 per mile however using your example they would pay you £6.00 for the 50 miles, the current average price of diesel is £5.56/gallon so if your car does 50 miles to the gallon they contribute £0.44 to all of your other running costs and depreciation on your car! 

    One thing you can do is claim tax relief on the difference between the rate you are paid and the HMRC rate (Mileage Allowance Relief, in this case £0.25/mile) however you will need to speak to the tax office to arrange this.  You will of course need to keep accurate mileage records, one of the apps available on the market would probably make this easier.  If you have an area that is dedicated as a home office you may also be able to claim some of the expenses related to that are, again worth asking HMRC.

    Pete

    • Great answer thanks Peter!

      I knew you did not have to pay the advisory fuel HMRC rates but did not know about the tax relief angle thanks for sharing!

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