New limits for mileage claims?

[welshgasman]

Hi all,

I used to have my own limited company a good few years ago, when contracting, but closed it down properly when I could not get any more work for my skills.

Last year I was offered a contract and as it was likely to my only contract (getting on in years) opted for an umbrella company instead of another ltd company. Reason for this was i seem to remember it was more hassle shutting my company down than it was starting it up.

Anyway, the umbrella company now say that I must submit VAT receipts for minimum of 15p per mile and my mileage, whereas before I just had to submit VAT receipts and my mileage. I've just 'invested' in a diesel for economy purposes and so have gone from filling up every three days to once a week and from quick math would only get about 12p per mile.

Has anyone else been informed of this restriction.?

I *thought* the 15p rate was if they supplied you with a vehicle, whereas this is my own car.

TIA

[centurian]

Has anyone else been informed of this restriction.?

I *thought* the 15p rate was if they supplied you with a vehicle, whereas this is my own car.

How much your employer (the umbrella) is prepared to reimburse you - and how HMRC treats this - are two completely different things.

Your employer can re-imburse as little or as much as they like - and can make you jump through whatever verification hoops they like.

If those amounts don't match the prescribed HMRC amounts, you either have to reclaim (or pay) the difference through HMRC through a self assessment return.

You are correct that the HMRC prescribed mileage rate for your own vehicle is much higher (40p/25p). But this is the amount that HMRC will allow you to be paid without a BIK. It doesn't mean your employer has to pay you this amount.

It's probably just an oversight on their part. Speak to your umbrella - and point out that you feel you should be re-imbursed at 40p per mile as this is the prescribed HMRC amount. But it's worth being aware that these are two separate things - and if pushed, they can legitimately refuse.

[VectraMan]

This is about VAT, nothing to do with your personal allowance. Umbrella companies will reclaim the VAT you're paying, and keep it for themselves - they don't tend to advertise that fact, but you can't reclaim more VAT than you have receipts for, which is presumably where the limit comes from. This should be entirely independent of the 45p per mile you claim, but maybe their system is setup in a way that means they can't cope with two seperate things, to your cost.

Ask them.

[BolshieBastard]

Hi all,

I used to have my own limited company a good few years ago, when contracting, but closed it down properly when I could not get any more work for my skills.

Last year I was offered a contract and as it was likely to my only contract (getting on in years) opted for an umbrella company instead of another ltd company. Reason for this was i seem to remember it was more hassle shutting my company down than it was starting it up.

Anyway, the umbrella company now say that I must submit VAT receipts for minimum of 15p per mile and my mileage, whereas before I just had to submit VAT receipts and my mileage. I've just 'invested' in a diesel for economy purposes and so have gone from filling up every three days to once a week and from quick math would only get about 12p per mile.

Has anyone else been informed of this restriction.?

I *thought* the 15p rate was if they supplied you with a vehicle, whereas this is my own car.

TIA

For your own vehicle, its 45p per mile for the first 10,000 miles then 25p per mile until the start of the next tax year when it reverts to 45p again.

If you are VAT registered, you can also claim an element of the VAT back but as your are through a brolly, you cant. The brolly will probably reclaim it though which is why they want a VAT receipt.

[Contreras]

HM Revenue & Customs: Company cars - advisory fuel rates for period January 2008 to November 2012

The umbrella can pay expenses of 45p/mile without you incurring BiK. The 45p includes a fuel element (see above link) which in this case they are deeming as 15p/mile. The umbrella can then reclaim 20% VAT on the 15p fuel element if you provide them with receipts, which is why they are asking.

So you get 45p/mile without incurring BiK, and they get to reclaim 15*0.2/1.2 = 2.5p/mile VAT from HMRC.

In theory any Ltd Co contractor could do this too, except that most are on the VAT Flat Rate Scheme.

[welshgasman]

Thank you all for replying.

I expect then, from reading all the replies, that it is about the VAT and I will ask them about this on Monday.

[northernladuk]

MODS : Is it possible to change the title of the Umbrella section to large bright red font with a flashing sign above it please.