Help! - Claiming business mileage

[Wilko89]

Hi All,

Apologies if this has already been covered however I am seriously considering purchasing a Model S to use instead of a company car and am a little confused as to how i can go about claiming my business mileage. I have approached my company to ask if they have a policy for electric vehicles which proved a waste of time!

At present i claim 20p per mile based on my 2L petrol however with HMRC not recognising electricity as 'fuel' my company do not look as though they are willing to provide any monthly mileage rates. I am aware i can claim 45p per mile from HMRC however can this only be done at the end of the tax year?

I am hoping I would be able to claim something on a monthly basis to subsidise some of the finance cost and wonder if anyone has had a similar experience?

Thanks!

 

[Jebus]

Hi!

I had the same issue and challenge our accounts department who agreed to let me claim a portion of my electricity bill. They're not quite sure how to break it down so I just keep a record on a spreadsheet.

Don't forget if you don't claim any mileage you can claim the full 45p tax relief per mile (up to 10k miles then 25p). This is done using a p87 with HMRC which gave me a pretty healthy tax free allowance last year

 

[WannabeOwner]

If you are a high mileage driver, and if you can score a good Economy-7 rate for overnight charging, and perhaps also use some free supercharging for a decent-ish percentage of your usage, and assuming your 2L Petrol was not "super frugal", then my rule-of-thumb is that you ought to be able to save £100 per month, on fuel, for each 10,000 miles you drive p.a.

Plus if you can plug in at work, given that "electricity is not a fuel", then no benefit in kind going on there is there ...

 

[DJP31]

You say you are considering the Tesla instead of a company car. If you are using your own car on business then your company can reimburse you at a rate up to 45p per mile (for the first 10k miles then 25p) without incurring you with a tax charge. This is NOT a fuel rate and is not fuel type dependent. It is the rate that HMRC have decided covers ALL the costs associated with running a car - insurance, depreciation, road tax, servicing and fuel.

Does anyone else in the company use their own car on business? If yes then what does the company pay - you should be able to claim the same.

You mention claiming the 45p from HMRC, that's not quite accurate. As @Jebus states, it's tax relief, so if for example you did 10k miles and received nothing from your company you would not pay tax on £4,500 of your income that you would otherwise pay tax on.

In an extreme example you could Supercharge 100% of the time and still claim 45p a mile from your employer. It's not a fuel allowance, it's a "using your own vehicle" allowance.

My company pays me 45p/25p a mile, it's my car not a company car. Works beautifully!

If you take the plunge, and don't already have one, here's a referral code to get £750 off and free Superchargering.

My Tesla Referral Code

 

[Jebus]

Also worth pointing out that if you get a car allowance from work which reduces the amount of mileage they would pay, this won't affect the HMRC claim.

 

[TC56]

The company I work for took the view that they would give me the same rate as a diesel car.

 

[culverwood]

Beware of making up rates without HMRC agreement. The company I work for is currently having problems with HMRC due to rates on petrol/diesel on private mileage incorrectly charges. If electricity is not recognised as a fuel then fuel allowance cannot be claimed. Of course the converse is that of your company has a charger then use of that is not counted as fuel.

 

[DJP31]

Beware of making up rates without HMRC agreement. The company I work for is currently having problems with HMRC due to rates on petrol/diesel on private mileage incorrectly charges. If electricity is not recognised as a fuel then fuel allowance cannot be claimed. Of course the converse is that of your company has a charger then use of that is not counted as fuel.

It is not a fuel allowance, so doesn't matter whether it's petrol, diesel, hydrogen or electric. It is a Mileage Allowance Payment (MAP). The crucial point which is often the cause of problems is the car being a company car. That's a whole different ball game, and the OP is asking about using his own car, so the MAP applies. Link to the HMRC page here:

Expenses and benefits: business travel mileage for employees' own vehicles: Rules for tax - GOV.UK

 

[WannabeOwner]

the OP is asking about using his own car,

I noted that but it seemed to be at odds with this:

"At present i claim 20p per mile based on my 2L petrol"

or is the company OK to pay that reduce rate, based on engine size, rather than the 45p/mile rate?

 

[DJP31]

I noted that but it seemed to be at odds with this:

"At present i claim 20p per mile based on my 2L petrol"

or is the company OK to pay that reduce rate, based on engine size, rather than the 45p/mile rate?

I believe he currently has a company car and claims 20p for that, and that the Tesla would be opting out of the car scheme. I haven't had a company car for donkeys years but wouldn't expect to receive a car and 45p a mile. There's probably some limit on what can be paid to company car drivers.

If it's your car then the company isn't obligated to pay the max 45p, but if they don't then you can claim tax relief on the difference between what you do get and 45p.

 

[WannabeOwner]

Very helpful, thanks.

 

[Tuscan_Raider]

My company offers car or 'opt out' monthly allowance. As a big company, we follow HMRC guidance closely. For either, car or allowance, you get a 'business miles' mileage rate reduced from the HMRC max of 45p on the assumption that the allowance (or car!) covers some of the running costs. This is different petrol/diesel and for hybrids it is based on the ICE engine type. They are now getting HMRC guidance to work out an 'all electric' mileage rate (just for me!) and adding it to the system in time for my car arriving! Will let you know what it is...

 

[DJP31]

My company offers car or 'opt out' monthly allowance. As a big company, we follow HMRC guidance closely. For either, car or allowance, you get a 'business miles' mileage rate reduced from the HMRC max of 45p on the assumption that the allowance (or car!) covers some of the running costs. This is different petrol/diesel and for hybrids it is based on the ICE engine type. They are now getting HMRC guidance to work out an 'all electric' mileage rate (just for me!) and adding it to the system in time for my car arriving! Will let you know what it is...

That is interesting and makes sense. The 45p is calculated to cover all the costs of using your own car, so if you are getting a car allowance that should be taken into account. My previous Lexus 2.5l petrol hybrid did 35 mpg which is about 16p a mile. Using E7 electricity and ignoring free Supercharging the Tesla costs about 3p a mile, so arguably claiming 13p a mile less than allowed for a 2.5l petrol car would be about right.

As owner/Directors of our own small company we just got rid of company cars and gave ourselves a pay rise, and charge 45p a mile. I can understand how a large company accountable to outside investors/stakeholders would take a different view.

It will be very interesting to hear what HMRC come back with. I wouldn't be surprised if they duck the issue and say the 45p is the maximum and it's up to employers to decide, especially as their official position seems to be that electricity is not a recognised car fuel.