Recruiter

Just had a visit from the Inland revenue.
they audited my PAYE records. We own two scoobys (RB5 and MY99). My member of staff claims 15p per mile for mileage expenses (business mileage only) the revenue have said as lo9ng as you can justify it 15p is OK, however the other arm 'The contributions agency' state that any thing over 10 per mile is a benefit in kind and accordingly is subject to employers and employees NI.
We have been instructed by them to pay these expenses at 10 p per mile

My car is fully expensed and clearly isnt caught up in this dispute. I now have one severely disgruntled member of staff who is caiming that she is 5p per mile out of pocket. I must admit that I sympathise with her and have appealed on her behalf.

Has anyone had a similar experience? If so could they advise on a course of action.

Thanks Geoff Painter

carl

The government's FPCS scheme allows you to be paid 45p per mile for the first 4000 miles and 25p per mile thereafter for a vehicle in the 1.5-2 litre category. In fact, if you are paid less than that by your company you can claim tax relief on the difference. It's all somewhere on the government's website at

XRS

The Revenue should normally be prepared to negotiate a dispensation, and it is not unusual for them to accept the AA rates. However, these take into account the cost of ownership which your colleague does not have to pay. I should think that if you can demonstrate the actual cost of petrol is around 15p they should agree. Either that or pay for all her petrol!

Recruiter

Thanks carl, this car is company supplied, insured and taxed but not fully expensed. Therefore these rules do not apply (personal cars used for business mileage)

PT

Recruiter,
If I were you I would go back to the IR and try again. I work for a large (read L A R G E) multinational which pays employees with a company supplied car (but no petrol paid for) 15.9p per mile for a 2.0 litre car and the Inland Revenue have NEVER questioned it - I think they are trying it on.

GaryC

Geoff - trust you are well!

A bit different I know. I opted out of co. car scheme and get car allowance - accordingly I have just been told (by IR) that I can claim/we can give 25p/mile (35p for 2000cc+!) for business mileage.

Useful - as 15p/mile for petrol is 'optimistic', 25p/mile is cash generative!! Wonder if I can slightly bore car out to 2001cc???

Gary

Nick Lines

Agree with GaryC - take the money (or provide employees money) for a car in the form of an allowance. This is taxed as income, therefore doesn't come into the FPCS scheme. Alternatively, you could use the other calculation for getting a tax rebate which requires more business miles compared to personal miles + receipts for things but allows you to write off depreciation of the car against tax (and loan interest, I think).

Bit academic as your situation is different, but it may be worth thinking about to keep your staff happy. (But insurance+servicing may kill 'em).

BladeRnnr

Hmmmmm...........

Looks like the robber Barons are back......
Or is it

Tony "King John" Blair
John "Sheriff of Nottingham" Prescott

Looks like we need a new version of the Magna Carta or lets

Do a King Charles 1 and 2 (do loose Your head sir....Suits You sir, does Sir ,Suits you !)

and
now that the royals are a bit more behaved ,put them Back in power (but keep reminding them about Chas 1+2 if they get any Ideas !!)

Can't be any worse than the bloody setup we've been having since the civil war.

mike f.

[This message has been edited by BladeRnnr (edited 20-05-2000).]

Recruiter

Hi gary, yes I'm well, is business good over there?
I think the point of the arguement is that for Inland Revenue Tax purposes 15p is perfectly OK, we already have dispensation. But!! the national insurance guys ( who have now merged with them) disagree and say anything over 10 pence is a benefit in kind and attracts employers and employees National Insurance. She does both high personal and business miles thus I do not intend to fully expense the car as NI is also due on the fuel scale charge. as you can see I have a real problem with paying excessive NI
More contributions would be geatfully appreciated

Geoff Painter

James Neill

iTrader: (1)

This leaflet details the rates you can get before it becomes a taxable benefit