Car mileage killing me

[Doubleduck]

Hi guys this is my first post be gentle
I have been PAYE past 30 years but recently got a 3 months tempory posting as a service engineer
My problem is I'm using an umbrella company. I had to buy a car to get the job.
I,m only getting £11.50 an hour but I,m driving over 500 miles a week to various jobs.
I'm exceding my tax allowance by a long way. My question is will I ever get back all the
money its costing me for travel ?

[northernladuk]

Hi guys this is my first post be gentle
I have been PAYE past 30 years but recently got a 3 months tempory posting as a service engineer
My problem is I'm using an umbrella company. I had to buy a car to get the job.
I,m only getting £11.50 an hour but I,m driving over 500 miles a week to various jobs.
I'm exceding my tax allowance by a long way. My question is will I ever get back all the
money its costing me for travel ?

3 months = 12 weeks * 500 = 6000 miles. You are allowed 10k miles at 40p a mile and after that is 25p a mile.

How are you exceding your tax allowance?

Quick answer is you will never get back the money but you will get relief on the numbers above.

If the numbers don't add up on the contract then don't do it. Get one that the numbers do work up for.

Have you tried mentioning this to your client and that the cost for travel doesn't weigh up with the rate they are paying you and negotiate to expense it back them ?

Why did you take a contract when the numbers don't add up?

[Paddy]

Hi guys this is my first post be gentle
I have been PAYE past 30 years but recently got a 3 months tempory posting as a service engineer
My problem is I'm using an umbrella company. I had to buy a car to get the job.
I,m only getting £11.50 an hour but I,m driving over 500 miles a week to various jobs.
I'm exceding my tax allowance by a long way. My question is will I ever get back all the
money its costing me for travel ?

500 miles in a good Diesel car shound cost around £40 to £50. What car did you buy?

[Doubleduck]

I have never heard of this umbrella system before.
I expected to be paid a basic wage plus milage allowance ie: 500 x 40p a mile £200
the way my old PAYE company worked. the more miles you did the more you got
Instead my millage is offset against any income tax I pay
so I'm never gonna to earn enough to use up all my available tax allowance
I can see the advantage if I was just driving to from work. but i'm travelling to 5 or 6 jobs per day
paying for car, insurance, road tax , fuel etc

[Support Monkey]

Am i reading this right and your mileage is in with the £11:50

Normally if driving is part of the job you should be billing the business mileage back through your umbrella company to the end client but this should have been the question you asked at interview so its a lesson learned.

As Northernlad said stick in the mileage to the umbrella and get the tax relief, and if you get a renewal on the 3 months tell them you want the rate plus mileage from the client

[Paddy]

Am i reading this right and your mileage is in with the £11:50

Normally if driving is part of the job you should be billing the business mileage back through your umbrella company to the end client but this should have been the question you asked at interview so its a lesson learned.

As Northernlad said stick in the mileage to the umbrella and get the tax relief, and if you get a renewal on the 3 months tell them you want the rate plus mileage from the client

I was having another think about this. If you take the fuel costs and running costs of your car into account, you will also need to deduct employers NI contributions, holiday pay etc. This will leave you with below the minimum legal wage. Your umbrella company will be breaking the law even if they claim that they are not doing so.

[VectraMan]

My problem is I'm using an umbrella company.

The problem is not the umbrella company, all they do is collect the money and calculate the tax. The problem is the client paying £11.50 per hour and no extra for doing 100s of miles, and of course you for signing up to something without bothering to check how much you were going to be paid.

Very roughly, if you pay 20% income tax then the tax relief on the mileage means you're refunded 20% of the travel costs - i.e. 80% of it is paid by you.

[Aman]

It doesn't matter whether you have a Limited Liability Company, are employed by an umbrella scheme or even have a plc, your expenses are coming off your top line.

A client asked me to provide transport in this way, I said I wouldn't provide transport unless it was expensed. I walked.

I know of quite a few people who have been persuaded into this situation by agents saying "they'll get it all back from the taxman". On top of the motoring distance costs, not to mention the fee to process their payment they also had to provide evidence of business insurance for their vehicle of the client.

The end client's own staff aren't much better off. They have to provide their own transport, often a van meaning a second vehicle purchase, provide evidence of business insurance, take in fuel receipts every month with odometer readings to prove they aren't cheating the system. Some of them only have 20km a week.

The words 'that', 'game' and 'soldiers' spring to mind.

I've had agents and umbrella companies try this on with me before.

You would be better looking for a new contract where motoring distance is expensed unless you can negotiate at renewal or before.