Mileage rate petition

[Craig@Clarity]

With fuel prices rocketing, people need to get on this https://petition.parliament.uk/petitions/600966

[northernladuk]

Interesting one. They've resisted putting up for years despite petrol going up but it's accelerated recently so right at the forefront of people's thoughts. Wonder if HMRC will argue second hand prices have gone up as well so the depreciation on the vehicle that is covered in that 45p is less to offset it though. Petrol was around 129 per litre last time it went up in 2011 so there is a very strong argument for it.

[malvolio]

Interesting one. They've resisted putting up for years despite petrol going up but it's accelerated recently so right at the forefront of people's thoughts. Wonder if HMRC will argue second hand prices have gone up as well so the depreciation on the vehicle that is covered in that 45p is less to offset it though. Petrol was around 129 per litre last time it went up in 2011 so there is a very strong argument for it.

Some years ago when it was 40 ppm the RAC calculated that the cost of the average mid-size saloon of the kind most of us would drive was 68 ppm. It has to be rather more than that now.

[northernladuk]

Some years ago when it was 40 ppm the RAC calculated that the cost of the average mid-size saloon of the kind most of us would drive was 68 ppm. It has to be rather more than that now.

That's very true so it's well overdue a re-think, particularly in the current climate.

Not quite related but remember nearly 30 years ago I was working for a small company who had a very generous tiered mileage rate. 80p for cars 3L and up. Mainly because the owner had a 3.5L Aston Martin and no one else had anything close. I was up and down to the Midlands three times a week so bought an old 3L Supra for 2k. Was making 3k a month in mileage payments for awhile before the boss got hacked off and upped it to 3.5L. <winking required but not allowed>

Oh the good old days.

[Guy Incognito]

There is an assumption everyone is cheating the system hence it has to be about half the real figure...

[ladymuck]

Ah well, it were a nice try:

The AMAP rate is advisory. Organisations can choose to reimburse more than the advisory rate, without the recipient being liable for a tax charge, provided that evidence of expenditure is provided.

The Approved Mileage Allowance Payment (AMAP) rate aims to reflect running costs including fuel, servicing and depreciation. Depreciation is estimated to constitute the most significant proportion of the rate, with fuel constituting around a third of total costs included in the rate. In most cases, only a proportion of non-fuel costs can be attributed to business usage, and the AMAP rate takes this into account.

The current advisory rate is 45p/mile for the first 10,000 miles and 25p thereafter and applies to employees and volunteer drivers who use a private car for business mileage. The rate applies across all fuel types.

The AMAP rate is intended to create administrative simplicity by using an average. This means that the rate will be more appropriate for some drivers than for others.

The AMAP rate is advisory, and organisations are not required to reimburse at this level. It is ultimately up to the individual organisation to determine the rate of mileage reimbursement they offer employees or volunteers.

Organisations can agree to reimburse drivers the actual cost incurred, where individuals can provide evidence of the expenditure, without an Income Tax charge arising.

There are extraordinary global circumstances contributing to the sustained period of high fuel prices, among them the Russian invasion of Ukraine. At Spring Statement 2022 in response to fuel prices reaching record levels, the government announced a temporary 12-month cut to duty on petrol and diesel of 5p per litre. This cut represents savings for households and businesses worth around £2.4 billion in 2022-23.

As with all taxes and allowances, the Government keeps the AMAP rate under review.

HM Treasury

[Craig@Clarity]

I got the same email from them this morning too. Basically computer says no!

[malvolio]

So another perfect example of HMT only thinking in terms of employer and employee. What they are saying is that the AMAP rate can be anything the employing company decides on, without a tax penalty, provided proof of expenditure is shown....

That means then that MyCo can pay the full cost of running my car less personal mileage provided I can demonstrate that the miles travelled are genuine and that al least that amount of fuel has been purchased. That includes servicing (presumably in proportion to business/personal mileage) and depreciation.

So if MyCo pays me 97.6p a mile, I log my business miles accurately (always have done, in fact) and provide receipts, I'm covered....

[ladymuck]

So another perfect example of HMT only thinking in terms of employer and employee. What they are saying is that the AMAP rate can be anything the employing company decides on, without a tax penalty, provided proof of expenditure is shown....

That means then that MyCo can pay the full cost of running my car less personal mileage provided I can demonstrate that the miles travelled are genuine and that al least that amount of fuel has been purchased. That includes servicing (presumably in proportion to business/personal mileage) and depreciation.

So if MyCo pays me 97.6p a mile, I log my business miles accurately (always have done, in fact) and provide receipts, I'm covered....

So one way you could calculate the pence per mile due is to keep all the receipts for petrol and maintenance throughout the year, log all business and personal mileage then work out the pence per mile it cost to run the car for the total miles driven and then expense the business mileage at that rate.

[Lance]

So another perfect example of HMT only thinking in terms of employer and employee. What they are saying is that the AMAP rate can be anything the employing company decides on, without a tax penalty, provided proof of expenditure is shown....

That means then that MyCo can pay the full cost of running my car less personal mileage provided I can demonstrate that the miles travelled are genuine and that al least that amount of fuel has been purchased. That includes servicing (presumably in proportion to business/personal mileage) and depreciation.

So if MyCo pays me 97.6p a mile, I log my business miles accurately (always have done, in fact) and provide receipts, I'm covered....

No. You have to prove the entire cost base. Depreciation, tyres, oil, servicing, insurance, tax etc. etc.
And factor in personal use. Then you can claim it at the COST of running it, not an arbitrary figure.

And you will have to put any extra money paid over the AMAP rate on a P11d.