If you don’t mind me asking what’s are your allowances?
We don’t get a monthly allowance, just milage allowance which is 40p for the first 10000 and 25p for the rest tax free. I’ve just sat down and done my sums and with the current fuel prices etc I’m loosing over £1k per year. I’m having a meeting in 2 weeks when the md gets back. I just want to arm myself with other suggestions as to what other people are getting.
Personally I’d like a monthly allowance, then a lower milage allowance.

Thanks in advance.

Yes, I do quite a few miles for work in my car (over 700 business miles last month).

40p/mile for 10k and then 25p/mile are the HMRC approved rates.

http://www.hmrc.gov.uk/rates/travel.htm

AFAIK… Your company can chose to pay you more than these figures but you are meant to pay tax on the amount above the approved rates. If you are paid less, you can claim tax back.

Via my MP, I’ve previously tried to find out why HMRC haven’t reviewed these figures. My information is at home, but IIRC the approved figures date from when fuel was something like 80p/litre, not £1.20 or more.

HMRC gave me a BS response and I’ve not got round to annoying them further about it.

If you are a higher rate tax payer you can claim the difference between 25p and 40p from the tax man up to 10000pa

I thought the mileage allowance was for wear and tear and you could put in separate claims for fuel?

How many miles are you doing?

Surely you have a case for a “proper” allowance?

I remember doing a recruitment job that involved a lot of driving – we got 25p per mile and that was it. Not useful.

http://www.unison-scotland.org.uk/briefings/mileagerates07.html

In April 2002 the Inland Revenue introduced a system of tax-free payments, called Approved Mileage Allowance Payments (AMAP). Under this system, a flat rate of 40p per mile applies for the first 10,000 annual business miles and a 25p per mile for all annual miles exceeding this, regardless of engine size type of car driven.

How HMRC can believe that motoring costs haven’t increased since 2002 is beyond me.

http://www.ukpia.com/fuel-prices-historic-data.aspx

Historic data that fuel was around 75ppl in 2002.

Last year I did 12000 this year should be 15000 I was promised 20-30000 when I took the job on in 09. Thing is the HMRC only allow you to recieve the 40p 25p tax free, I agree that when those rules came out the cost of motoring was less but tbh we’re not going to be changing those rules.
I just want to go to my MD with some realistic figures (Which I have) and some other solutions (Which is why I’m asking what other people are getting)

I would like to receive a fixed amount each month “Car Allowance” which will be taxed. The thing is I could do with having an idea on how much and if its the norm?

Previous jobs I’ve had company cars etc so this is all new to me.

How are you down £1k/year? 25p covers my fuel and even the loan payments for me.

40p/mile for 10k and then 25p/mile here also
I do way less than 10k/year
Works out good for me now I have a diesel at 47mpg

Take the cost of your car over 2 years and all the servicing, insurance, RFL, MOT etc and then work out how much milage you’re doing thus earning. Then subtract one from the other! I loose £1191 per year. If I didn’t need the car for the job then we’d be a 1 car household therefore I expect (and was told at the interview) the car to pay for itself.

£6k pa (which is effectively salary and taxed as such – so about £345 a month in your pocket if you’re on lower-rate tax, £327 on higher), then 20p a mile. That comes with the restriction that your car has to be under 5 years old and 100k miles. Essentially the allowance covers buying and insuring something suitable, the per-mile covers fuel and maintenance.

That kind of amount, if you’re doing the usual company car 3 year cycle, means it’ll cover a typical family diesel hatch – Focus, Astra, maybe low-end Octavia / Mondeo – on contract hire or PCP. If you add what you’d pay to run your own car you could get something nicer.

Personally, I bought a year-old Civic which had done a big chunk of depreciating already, I plan to keep it 4 years so the deal covers my work and personal miles with a bit left over towards running my motorbike.

You get tax relief on the difference between your mileage rate and the 40p one, which isn’t the same as getting the whole difference (it doesn’t add up to a lot really unless you do big miles).

Do you mean a car allowance or a mileage allowance?

I get a monthly amount toward buying / leasing a car and then a mileage rate on top.

Mine is 40p for first 4k, 30p for 4k – 10k then 20p for everything else.

Don’t forget depreciation.

Essentially HMRC doesn’t and won’t care that you lose money driving. It would rather you took other forms of transport, in the probably forlorn hope that they would be greener. Even though they would probably be more expensive and slower.

I think you need a car allowance really. Unless your company is happy for you to represent them in a banger, or pay in time and money for alternative transport.

.

If you’re loosing money then maybe you’ve chosen a car thats too expensive for what you’re using it for – tax, insurance, servicing and fuel cost are all fairly constant but the car is as cheap or expensive as you choose it to be.

The HMRC HATES cars. Doesn’t matter how essential they are, they will kill you for driving one.

Hence we keep our motors outside the business.

If you’re loosing money then maybe you’ve chosen a car thats too expensive for what you’re using it for – tax, insurance, servicing and fuel cost are all fairly constant but the car is as cheap or expensive as you choose it to be.

Agreed but I drive a 5yr old Passat tdi, does a consitant 45mpg (53mpg on a good day)
I need a big car to do the job as I have to carry equipment around sometimes.

Simong and Bushwacked, thanks thats the sort of thing I’m after, hard figures to do some sums with and something to take to the meeting!

Yeah, but apart from driving to and from my normal place of work (which you don’t get paid for), it’s 40p a mile for me. I probably don’t do that much to be honest. Not done a full year yet but I’m guessing I drive about 1k on work business.

Sometimes it’s not really worth claiming the allowance, you might feel better compensated if you just nick stationary and computer equipment to the value you feel appropriate. Works for me.

If I didn’t need the car for the job then we’d be a 1 car household

Grounds for a car allowance.

EDIT: Hang on.. if you didn’t need the car to actually DO the work, would you not be using it to get to and from the office either?

Get a cheaper car so you cant loose on depreciation?? – My work complained it was not nice enough I suggested I would drive any nice car they bought. they never mentioned it again.
Another way of companies exploiting workers – you are an essential car user but they wont provide the car or running costs. Imagine having to buy your own computer and desk
HMRC wont change unions ahve petitioned them for years re this
You can get 20 p per mile for cycling if that helps

We’re on 40/25p due to HMRC ‘guidance’ but I do very little business miles so it’s fine for me. doing 10k+ miles and having to have a second car just for your job surely screams out you need a company car or allowance?

EDIT: Hang on.. if you didn’t need the car to actually DO the work, would you not be using it to get to and from the office either?

I’d ride to work! Although the last time I rode in they bolloked me! To which I replied, pay me milage to drive to work then I’d drive everyday but until then I decide how I get in on a daily basis!

Check your insurance policy too. Many only cover you for private use.

We get the standard rates. IIRC the wider NHS adopted higher revised rates but we stuck to the old ones (this was a couple of years back). We get a lump sum which is around £750-£800 pa then the 40ppm/ 10000 miles etc. I have a lease car at the moment which goes and have bought it’s replacement already, 40ppm should cover the costs. I agree though it’s archaic that HMRC do not use current fuel rates. Our place has also conveniently dropped the over 2.0l payment rate which was 44ppm and around £950 pa.
I’m considering not havng regular user and only claiming the 25ppm when it suits me to drive.

I ride in a couple of times a week and checked this out with our fleet manager as my boss is the kind to moan that I have a lease car and it’s not at work. But no issue. Another reason I’m tempted not to go for the regular user is that I always have big estates for family/ bikes etc and end up being the one who can carry large stuff etc for work. Not in my new one I’m not.

45p/25p for us if it’s your own car and you don’t get a car allowance
40/25 if you do get a car allowance.

I’m about to start a new job next week (after 3 months being unemployed. Yay!) and have been offered a £255/month car allowance – although I believe that it is only available to be spent on the firms ECU (Essential Car User) scheme. I’m not sure whether there will be an additional mileage allowance on top. I hope so as I’ll be travelling from the East Midlands to Barrow-in-Furness on a weekly basis for the next few months (up to 500miles/week). Apparently, all will be explained on the induction course next week.

Agreed but I drive a 5yr old Passat tdi, does a consitant 45mpg (53mpg on a good day)
I need a big car to do the job as I have to carry equipment around sometimes.

OK so 45 mpg. Diesel is about 1.20 / L but even at 1.25 that means FUEL is costing you 12.5p per mile. How many miles a year are you doing? I can’t see how if your mileage is high you are struggling (say 15000 miles per annum = £5250 for costs other than fuel).

I do about 16,500 miles per year and I get (as expenses) 40p per mile. That’s about £6500 per year and I reckon it costs me £1500 per year in diesel. That leaves £5000 for wear and tear, depreciation etc.

I’m certainly not losing any money. 😀

It irritates me that my job is down as a casual car user, which means I have to have access to a car to use for work given notice. But I do so few work miles (less than 500 per year) that even getting paid a fair rate for mileage it costs me money to insure my car for business use and fuel to take the car to work and back (I usually bike).

OK, here’s my sums bearing in mind I wouldn’t have the car if I didn’t need it for the job.

Total Income for 2010/2011 for fuel £5031
Then minus the cost of the car over 2 years/repayments back into my bank account, not considering interest!
Fuel
Depreciation at 15%
MOT
Servicing (tyres, oil, filter, brakes etc)
RAC
RFL
Insurance (Inc company business)
equals £6482 per year
Take the total costs £6482 and subtract this from the income £5031 I loose!

I get a £300 a month car allowance on top of my salary which is taxed. I then claim 20p per mile for miles I do with work (doesn’t include commuting to and from work). I probably do 10,000 to 15,000 miles a year with work visiting sites. Not a problem adding business use to my insurance.

The car allowance is to cover the cost of owning the car and mileage allowance for running costs. I have an old Focus estate, some guys have new cars on lease schemes and some guys are running really old bangers….

I do about 16,500 miles per year and I get (as expenses) 40p per mile. That’s about £6500 per year and I reckon it costs me £1500 per year in diesel. That leaves £5000 for wear and tear, depreciation etc.

I’m certainly not losing any money.

Average diesel price is 121.9p / litre – you’d have to be doing over 60mpg to only spend £1500 a year on fuel.

52 plate mondeo diesel here, £250/annum depreciation.
15% depreciation – there is the problem..

your model is distorted as you are paying off the capital in the car in two years. This takes no account of the residual value of the car.

in the end it will depend on the size of your company/ how much they want to keep you happy

small companies are more flexible, big one’s have HR departments with “rules”

if they are soft they will go for a sob story (and may bung you a pay rise in lieu), if not you will get at best a sympathy and “push-off”

Average diesel price is 121.9p / litre – you’d have to be doing over 60mpg to only spend £1500 a year on fuel.

I paid £1.179 this week which is the highest for some time plus all my miles are to/from head office. A14 then M6 so I average about 60 mph, I drive a 55 plate 1.9 vectra diesel SRI so I am getting very close to 60 mpg.

my car is depreciating anyway and my insurance costs are the same. an mot is a legal requirement regardless of the use of the car.

just milage allowance which is 40p for the first 10000 and 25p for the rest tax free

loosing £1000 a year on that? Holy crap!

When I was on that, doing about 14-15,000 miles a year, I was COINING it in! Even on 25p/mile I was in clear profit!

WTF are you driving? Ferarri? 😯

How are you down £1k/year? 25p covers my fuel and even the loan payments for me.

I bet the mileage is high in this case.

Having a company car/car allowance in many cases is overwhelmingly for the benefit of the employer, not the driver. Many left company car schemes about 9 years ago when tax on them became too punitive. I was one of these people, sick of paying through the nose for a vehicle i didn’t want and being forced to notch up miles that were for my employer’s interests, not mine. My view was that; life behind the wheel of a grubby run of the mill saloon, in the conjected south east of England, was not something I should have to pay for!!!

The cost per mile is much higher for drivers who do low mileages. Those who do high mileages wear their cars out, spend more on wear and tear items and take an extra hit on extra depreciation.

Getting the balance just right is tricky and owning a car places all the risk on the employee, so these are grounds for a proper car allowance.

I used to get £450 a month plus 8p a mile. This worked well for me because I was able to cut my mileage to less than 10k when switching from a company car. Prior to this, I was doing extra mileage to get to 18k, after which the taxable benefit for the car was halved.

Even with an allowance, I was still able to claim relief on the difference between 8p/mile and 40p/mile for the first 10k miles and on the 25p thereafter. I can’t remember the exact detail now, but it was definitely worth claiming.

I couldn’t believe how, after many years of paying company car tax, that the HMRC were having to pay me. How stupid was that change in the method of taxing company cars? The government must have lost a fortune in tax receipts! I think they killed a golden goose there, but then Labour are all about punitive taxes and the politics of envy. They must have misguidedly thought we were all enjoying our crappy company cars and the disadvantages they brought! Commercial numbnuts those lefties eh!!

These figures of 40p and 25p are what you can claim before any tax is due and have been in effect for at least 10 years. It’s high time they were reviewed as cars, fuel, RFL have all gone up markedly in 10 years!

If you get paid a set monthly car allowance, this is treated as income and is taxed at whatever your rate of pay is. If this additional income will take you into the higher earnings bracket, you are a bit stuffed if you have savings and other benefits in kind.

If it is possible to easily/quickly get to your place of work on foot, by bus, bicycle or train, suggest to your employer that they provide a pool car for you to use, entirley at their expense! They need the car, not you, so get them to pay! Why should you have the hassle and responsibility of owning a car, just for their benefit?

It’s easier said than done, but sometimes you are better off changing jobs.

Good luck!

£6,500 per year taxable car allowance, paid same way as salary
car has to be 5 yrs or younger
17p per mile (claim difference upto 40p /25p as others have said from HMRC)
I do on average 15-20,000 business miles a year but when Im in the office its only 5 minute drive / 15 minute by bike so its cost effective for me to have opted out of the company car scheme

That’s a good allowance iain1775. What list value of car do you run?

I’ve estimated you get about £7.5k in your pocket, which should cover full running costs of a half decent car.