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Should I be Paid Mileage Allowance?

By: J.A.J Aaronson - Updated: 15 Jan 2019 | comments*Discuss
 
Mileage Allowance Tax Relief Taxman

Q.

I have sent a P87 form to HMRC and they have written back to me asking a few questions. One of them is why do my employers not pay mileage allowance (I am claiming back the tax relief on the whole 40p per mile as I have not been paid anything).

I work in the construction industry and so as far as I am aware my workplace is classed as temporary because I am based in the offices which are on the construction site.

I am not sure why I don't get paid any mileage allowance – it just isn't in my contract. Do employers have any legal obligation to pay mileage allowance?

(Miss R.S., 16 October 2008)

A.

Mileage allowance is the most common benefit offered to employees in the UK. The guidance regarding the tax treatment of this benefit is complex, but it hinges on a number of easily understandable premises. The first of these is that mileage allowance benefits are just that – benefits. While you are entitled to Tax Relief On Your Mileage, your employer is not under any obligation to pay any set amount.

What Should Employers Pay?

As it stands, employers may, at their discretion, pay mileage allowance at a rate of up to 45 pence per mile* for the first 10,000 miles travelled by an employee. Any mileage over this amount can be reimbursed at a rate of 25 pence per mile. However, the rate at which employers actually pay can vary wildly.

In your case, it would appear that you are not being reimbursed at all. It is important to remember that the 45 pence per mile rate is not necessarily money to which you are entitled – that is, it is not money that either your employer or the taxman is statutorily obliged to part with. Rather, you are entitled to tax relief on a portion of your income equivalent to 45 pence for each of the first 10,000 miles, and 25 pence for each mile after that.

Tax Relief

The short answer, therefore, is no, your employer does not have to pay you a mileage allowance. However, the taxman offers tax relief on the difference between the rate at which your employer offers reimbursement, and the maximum allowable rate of 40 pence per mile. In your case, they should therefore offer 100% tax relief.

To a certain extent, however, the tax office is right to ask why you are not being offered mileage allowance, particularly given the requirements of your employment. Employers usually find that it is in their interests to offer mileage allowance, particularly if it avoids the necessity to provide a company car fleet. Regardless, aside from the fuel costs you must also consider the cost to you in terms of the depreciation of your vehicle. As such, if you are in a position to do so you may wish to push your employer to begin offering this type of benefit.

*Figures have been updated for this 2011-12 tax year.

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My employer pays me 25p per mile but my expenses are fully reimbursable to the client I am currently working for. They charge the client the full 45p.Is this allowed? It doesn’t seem fair that my employer is making a profit on my business expenses.
Oofus18 - 15-Jan-19 @ 9:56 PM
Hi, My employer doesn't pay any mileage allowance, however they offer a company car scheme. My problem is, if I decline the company car, they don't offer any car allowance nor mileage allowance. In this case, could I claim back using the tax form?
LucianoA - 6-Dec-18 @ 3:26 PM
My employer has refused to pay my mileage as they say I have not put my odometer readings on the claim forms. I have always zeroed my milometer at Base before using car for business miles,then record it on my return to Base at the end of the day. They say this is a HMRC requirement. Is this correct?
Hellc98 - 5-Nov-18 @ 8:19 PM
Should I pay my employees millage for commuting to and from the office in their own vehicle? Or do I just pay from the office to site?
Daz2005 - 12-Jul-18 @ 7:08 PM
Hi. My employer pays mileage at 45p when I start the day at one site and need to travel to another. For two weeks I was temporarily moved to another site which caused my daily commute to go from 4 miles up to 27. I believed I should be paid mileage for the miles over my normal commute but I've been told no because I was just commuting to this other factory. So can an employer choose when to pay for business travel and when not to pay?
Sean - 7-May-18 @ 8:47 AM
Can my employer charge its client .45p per mile and only reimburse me with .25p per mile.I have no company car or car allowance.
Scott - 8-Mar-18 @ 5:16 PM
Hi, until this year I would claim the .45p per mile upto 10000 miles. Then drop to .25p I had contact from Concur stating that the rate is fixed at .45p regardless of mileage covered. I'm concerned this isn't correct, any thoughts?
chelskira - 6-Mar-18 @ 10:38 AM
I was wondering if anyone could assist me with advice, as I have a problem with my Business Mileage expenses and Holiday Pay getting paid from a previous employer. I left a business in October 2017, on leaving I was due mileage expenses and holiday pay, the business is refusing to pay me by saying that they have checked my previous mileage claims and these are incorrect, and I have been overpaid. If I do not drop the claims for my outstanding monies they will report me to HMRC, despite my expenses being authorised by a Director of the business every month for the last 3 years. On the Mileage Expense the issue seems to be the base for my place of work...........Since I started my base has been an office in Preston, I went there in the morning and reported back there at night if I was not out on call. The Director is now saying I had 2 places of business, the manufacturing site in Manchester for which I was responsible for in sales work and the Preston office. In the 3 years I never claimed mileage travelling from my home base to Preston or going back to home but would claim travelling from the likes of the Preston base to Manchester manufacturing and If I spent the day at Manchester I would claim the return journey home, as I did not class Manchester as my base. My question is, can you have 2 places for base when dealing with business mileage, Any advice would be greatly appreciated.
Racingman - 12-Dec-17 @ 1:51 PM
My employer have sent me and several of my colleagues to support another site which is located closer to our homes. After we came back to permanent workplace we have been informed that our milage wont be covered by employer due to new company policy. In the end all my colleagues been paid 0.35£ per mile and I have been turned down becuase temporary work place is closer than permanent one. HMRC offers to cover business milage but after two months finaly HMRC turned me down because temporary work place is closer to my home than site I have supported and there is not one word about such distance on HMRC site. My questions are : Can my employer turn me down like that when other colleagues live closer to temp site and been paid expenses? Once more I'm highlithing that employer made new policy when I've been already supporting temp site. Also I havn't been offered company car and I don't belive that my employer got right to tell me where I will travel by my own car without paying me expesnse for using it. Kind Regards
Marti - 22-Oct-17 @ 5:50 AM
im helping a friend at his office , i dont get paid but he says he can pay my mileage, due to disability im unable to work full time nor every day so thus gets me out when im able to. how do i stand tax wise etc
twinkle - 16-Oct-17 @ 1:45 PM
My employer have sent me and several of my colleagues to support another site which is located closer to our homes. After we came back to permanent workplace we have been informed that our milage wont be covered by employer due to new company policy. In the end all my colleagues been paid 0.35£ per mile and I have been turned down becuase temporary work place is closer than permanent one. HMRC offers to cover business milage but after two months finaly HMRC turned me down because temporary work place is closer to my home than site I have supported and there is not one word about such distance on HMRC site. My questions are : Can my employer turn me down like that when other colleagues live closer to temp site and been paid expenses? Once more I'm highlithing that employer made new policy when I've been already supporting temp site. Also I havn't been offered company car and I don't belive that my employer got right to tell me where I will travel by my own car without paying me expesnse for using it. Kind Regards
Marti - 11-Oct-17 @ 3:12 PM
My company requires me to attenf a training course in Gatwick and offering 30p per mile using my own car travelling to/from Manchester. Is this satisfactory?
ManEng - 3-Oct-17 @ 10:24 AM
@Mum - this sounds very miserly to me. The gorernment approved mileage allowance payment paid to professionals in their jobs is 45p per mile for the first 10,000 miles and 25p for higher mileages. I'd question your offer.
Han78 - 4-Aug-17 @ 12:53 PM
I have recently started at a new company who are in the construction industry, I am site based and have been told that I am not entitled to any mileage payment as the current site I am based on I will based on for over 40% of the time is this correct. I agree if I was office base then I would not be entitled to any payment but being site based I have to disagree, could you please advise who is correct
Stew - 28-Jul-17 @ 12:22 PM
@Pongo - You can’t claim for travelling to where you work, so perhaps that is where the first 40 miles comes in to it. You don't say either whether you are using your own car or a company one. If it is your own, then you may be able to claim mileage allowance relief. I have added a link to some additional information here. I hope this helps.
TheTaxGuide - 9-Mar-15 @ 12:01 PM
I've just started working for a new employer, I'm field based (Head Office is 150 miles away) & visit several sites. My employer says, 'The first 40 miles of travelling per day will not be covered by the company & mileage over 40 per day should be claimed at a rate of 25p/ mile. Can I claim Mileage Payment Allowance for the 40 miles per day the company will not cover & all the additional 20p/ mile difference in the Tax Rate of 45p/ mile (2015 rate)?
Pongo - 6-Mar-15 @ 1:35 PM
Iwork for a mental health unity .Am Ito claim travelling allawnce
n/a - 4-May-14 @ 9:55 PM
I work part time deliveringNHS prescriptions i do about 100mile a week that includes aboutaverage 80 to 90 drops a week. All my boss pays me is 25p a mile. I don't pay tax what the best thing i should do because i.am out of pocket at this price. Recentlypayed out £260 for a starter motor and last month i payed out £130 for tyres and brakes
PAUL - 9-Jan-14 @ 8:01 AM
I have submitted a claim for 9925 miles (my employer paid 25p per mile) and HMRC have stated that the distance stated between the two locations (my old place of work and my temporary new place of work) appear to be slightly overstated.They do not expand on this statement and nor do they provide clarity on what distances I am supposed to use.For example, I have claimed from my home address to the new temporary station but this is further (by around 14 miles) than my old place of work to the new place of work.I'm assuming that I was supposed to use the places of work as the distance claimed but I cannot find anything in the guidance to let me know this.Have I got this assumption correct?
robbie2063 - 13-Sep-13 @ 4:59 PM
I have been subject to a TUPE transfer and have been relocated 20 miles from where I live. My new employer is giving me a mileage allowance for the difference in the number of miles I used to travel to work and the new distance I travel.As my new location is now my permanent place of employment and the mileage is not business mileage as it's to cover my journey to work, won't all of this mileage allowance be taxable?
Georgina - 12-Sep-12 @ 12:49 PM
Can my employer take my fuel card off me with 2 months notice despite no change in my role and no offer of any other benefit to replace it? I have been wiht the company for 7 1/2 years in the same role
gwynj9 - 20-Aug-12 @ 9:07 PM
How many times in a year can I claim petrol allowance. I do not want to claim it all in on go
karen - 13-Jul-12 @ 11:27 AM
Can i make my kids shareholders of my limited co, and pay them a dividend to cover their university costs?
colin - 2-Jun-12 @ 11:24 AM
I work asa nanny, I use my own car for work use, ie driving the kids to school, activities etc, how much do i charge my employersfor prtrol per mile?
jncbckly - 28-Apr-12 @ 9:07 AM
Hi, I work on the books but use my own van, I fill up with my employers fuel card, am I entitled to anything back for wear and tear? Other employees on the books have company vans.
jon - 14-Mar-12 @ 6:23 PM
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