Mileage for employee consultant

[richy]

Hi. a little background, my ltd co is a consultancy, with 5 employees (consultants). 4 are paid PAYE only. 1 (me) is paid PAYE + occasional dividends. I'm hoping to figure out if I can reimburse mileage to an employee at 40p per mile.

I've got a new employee working for me who has asked me about reimbursing him for his mileage to my client in Essex for six months. The trip is from his home address in Cambs to Essex and back, each day. My biz office (where I work from, when I'm not also on site with a client) is in Coventry.

So for the employee travelling from Cambs->Essex can that be argued as a biz trip mileage? I'm not sure what address to put as his office address either..

If I cannot reimburse mileage at 40p mile as an expense.. can I reimburse as a "benefit".. that way I guess it is not an expense in my book keeping.. the employee then doesn't get that benefit of receiving it tax free..(no NI+income tax).. but does get taxed a little on the benefit of it (not sure if this benefit works out cheaper than just giving him more pay on his payslip though?)

Any advice or suggestions appreciated. Thanks, Richy

[richy]

I've dropped this idea now.. but any discussion still welcome.thanks, richy

[BolshieBastard]

Erm, ask your accountant.

You'll get far better, professional advice that way.

[NotAllThere]

The question is whether the client office is a temporary workplace for the employee or not. It seems to me, that as this is a 6 month assignment, then at least for those 6 months, it is a temporary workplace. You fully expect him to work elsewhere after that. Up to the point that his expected time working there exceeds two years, therefore, he can claim mileage as an expense. So long as you pay him no more than 40p a mile (up to 10000 miles, reduced after) then there's no BIK. Of course, as far as your co is concerned, it's a straightforward expense - no ernic or eenic.

Of course, what you should really do, is ditch all these permie liabilities, and take on contractors instead.