Using personal car for work?

For a job that involves some travel between sites, what do you receive per mile for using your own car?

I’m talking of employees rather than consultants or contractors. Option of a lease car has been made but summing up using existing car instead.

Cheers

45p plus a contribution of up to £80 to add business cover to insurance.

45p

45p/mile.

45p/mile on top of car payment.

At the old job it was 14p/mile on top of car payment.

45p per mile plus any upcharge on the insurance

45p/mile, up to 10k miles annually, then drops to (iirc) 12p/mile.

In line with HMRC.

If you get less than this, you can claim difference in a tax return.

If you get more, such as the contribution to insurance or a car allowance, it’s then taxable.

What Matt said, except it’s 25p over 10k.
24p for motorbike regardless of miles and 20p for a pedal bike

45p a mile for the first 10k and then 25p a mile after that.
It works out that I hit about 9.5k in November and then either stop travelling between sites for the last few weeks of the year or hire a car through the company.

Why? Surely 25ppm still more than covers your costs?

If you could have a company car/get a car allowance as part of your job but choose to use your own car HMRC set fuel only rates in the 10-20 pence per mile range (depending on engine size and fuel type) as other costs are covered. For private people without all that 45 pence is normal as that is the HMRC max rate where tax doesn’t have to be paid, your company could pay you £2 a mile but it wouldn’t be tax free.

45p for up to 10k miles, and the difference to upgrade to business insurance paid for.

Car allowance + 45ppm.

We have a very generous scheme, especially when your place of work is ‘home’ so all mileage is claimable.

45p per KM, payroll work out the Tax as I’m PAYE.

Home office based and any miles traveled are claimed. Trips over approx 300 miles it’s cheaper to rent a car, so I do that or work out the cost of a rental, with insurance and fuel, then claim however many km to the equal amount.

If you could have a company car/get a car allowance as part of your job but choose to use your own car HMRC set fuel only rates in the 10-20 pence per mile range (depending on engine size and fuel type) as other costs are covered. For private people without all that 45 pence is normal as that is the HMRC max rate where tax doesn’t have to be paid, your company could pay you £2 a mile but it wouldn’t be tax free.

I’m not sure that’s true. The car allowance is taxable income, so makes no difference to your costs whether you can claim that or not. Company car is different as it’s (generally) maintained so there are no additional costs beyond fuel

OK, I realised that 45p was the upper limit (tax reasons) but I wasn’t expecting that so many employees would actually get that much. Quite generous employers out there!

@5lab my point about taxation applies on to the per mile rate, 45 ppm is tax free regardless of other awards for car costs, above that it is taxable which is why very few do it.

To balance that I get 25ppm! That might make you feel better! I didn’t know about claiming the rest back as a tax return, I need to look into that

Quite generous employers out there!

Not really. It would cost the employer far, far more to supply you with a car and fuel it.

I’ve always got 45p per miles on the rare occasions I’ve done it. It’s ok for the odd journey but I’ve never been that convinced it covers the potential costs. The biggest one being risk. If someone bumps you then it is your insurance that takes a hit and likely you that picks up the excess.

Why? Surely 25ppm still more than covers your costs?

Modern cars cost more than that. Even my 9 year old, 135k, £30 tax, cheap insurance, nothing major gone wrong car costs around 38p/mile.

Edit: a lot of new cars cost a lot, lot more than 45ppm, and they don’t have to be that ‘posh’.

@bigdaddy – worth sorting that out.

I got 45p plus the insurance difference (though weirdly my insurance went down, apparently churchill went “well he drives for work so he’ll be more careful” or something)

Just wouldn’t do it with my current car, not worth it but I was driving a shitbox diesel mondeo so it cost nothing on depreciation and pennies on fuel and wear&tear

didn’t know about claiming the rest back as a tax return, I need to look into that

Tax relief on the difference, not the difference itself. You can offset the difference between 45pmm and what you were paid to reduce your overall tax bill .

Not sure that modern cars cost more to run. You’re getting recompensed for the cost of petrol, plus additional wear & tear & depreciation due to using it for business.

The assumption being you are already paying for the car so there doesn’t need to be a contribution to that part of the cost.

Something like a 911 costs 18pmm in petrol, so a standard family car will be comfortably less.

This link has some useful analysis:

https://www.uswitch.com/car-insurance/guides/car-cost-per-mile/

Used to get (I think) 21ppm – payment was based on fuel and capacity so I went big petrol, never came close to paying for itself.

I no longer work there.

@matt_outandabout how have you calculated that? Interested to see what I have forgotten.

If buying business insurance check that you don’t require ‘goods in trust’ cover. Having to pay out for losing someones luggage/tools (who isn’t in the vehicle) could be a blight on the day.

@doomainic

I had a spreadsheet a year ago – basically pulled every car cost from bank account and divided by number of miles a year.

Car loan

Fuel

Tax

Insurance

Maintenance

See this also: https://www.fleetnews.co.uk/car-running-costs-calculator

Where I work it’s 45ppm if you don’t have a car benefit, but if you do have a company car or cash allowance then it drops to it 12ppm.

I do bugger all miles these days as still WFH.

Prior to October I had a car allowance and so got something like 13p/mile for a 2.5 diesel. Have now been bought out of the car allowance (added as straight salary which is a much better deal!) and now get 45p/mile. As others have said, anything different and it’s a tax claim (-) or taxable (+)

@matt_outandabout The only items on your list that raise the ppm cost are fuel and maintenance. I didn’t include insurance (no extra cost to add business miles) car loan (I bought the car because I need a car to get to work, not because I need a car for work) and RFL, because I need that regardless of business miles.

If I needed a car for work I’d expect a car allowance or company car. Either way, the payment then only needs to cover fuel as the allowance should cover the cost of the car to buy and maintain.

If you could have a company car/get a car allowance as part of your job but choose to use your own car HMRC set fuel only rates in the 10-20 pence per mile range (depending on engine size and fuel type) as other costs are covered.

Car allowance – utter rubbish.

What else do you know nothing about?

45ppm here too, but car use not deemed essential so I’ve declined to include myself within it. I now just cadge lifts, cycle and previously we had access to a car club (now withdrawn).

Previously claimed <500miles p.a. and it didn’t cover the additional cost for adding business class 1 – my employer doesn’t cover that. Not helped by my car costing 27ppm average in fuel alone over the past 3 years, that’s now 34ppm (current) based on 149.9/ltr. Adding in VED and insurance puts me at about 54ppm. Then there’s MOT, servicing, consumables and repairs…

I just left the company car scheme as the numbers didn’t add up, and I hated the car…

I was handed a 18 month old Insignia(list price £27K) when I re-joined the company 2 years ago. The company paid for all fuel and I was charged for all non-work miles. I was paying £155 a month as a tax hit, and 16p/mile for personal miles so I took the option of changing to a car allowance when I could in March this year.

Car allowance of £5K/annum means I get about 3K in the bank, £250 a month. add on the £155 tax hit I no longer pay and it gave me a budget of ~£400 a month for a car. New car (24K on PCP) @ £376 a month inc servicing and insurance means the company is still paying for the car but I don’t have to do any miles to break even. I have to put tires on it. every company mile I do is @ 45p/mile for first 10K, then 25p/mile. i expect in a normal year to do about 15K company miles.

I get the 45p/mile that’s meant to contribute to the depreciation/running costs/petrol but even @ 1.45/litre, its costing me ~14p/mile on fuel, the depreciation is covered in the PCP payments. 8 months on and the car is worth exactly what I owe the finance so I’m struggling to see a downside to the deal.

If you own a car already, then the numbers might not work out the same depending on the depreciation and servicing costs of the extra miles you’ll put on it.

My employer had a contract with a car hire company and we were told to hire a car by the day for business use. You could choose to use your own at 45p, but if the hire car would have been cheaper your expense claim was capped at the car hire cost.

45ppm here, using own car. More than covers my costs given I get 50mpg in my car.
We have pool cars that if available you just claim what you spent in petrol on them.

I get about 11ppm, (engine size/type dependant) but also get a car allowance of £390pcm (gross).  So the mileage allowance is there to literally cover the cost of the fuel, and the car allowance to cover the cost of supplying a car for company use.

I then claim the tax back on the difference between 11ppm and the 45ppm HMRC rate via a P87.  If you go over about 7000 business miles you go over the P87 limit and fall into Self Assessment, which I avoided for a couple of years by underclaiming by tax rebate, then ended doing for a couple of years, but have now dropped back out of again.

Anyone who gets a car allowance AND 45ppm is doing very well!  The 45ppm is generally only applied to “casual business users” in my experience, not people who are required to have a car as part of their job, and thus either get a company car or car allowance.

@intheborders I’ll clarify slightly but my point is valid, what do you disagree with?
Every place I or friends have worked now or in the past work on the basis I say, if you could have a company car/allowance you get the lower rates set out by hmrc, if not you get the higher ones. It’s not compulsory but it’s how nearly all companies work.

Anyone who gets a car allowance AND 45ppm is doing very well!

This, in spades.

Anyone who gets a car allowance AND 45ppm is doing very well!

This, in spades.

hmmm, I’m the first in over 30 years to NOT have a company car (small family owned business) so they may not have completely understood. Think I’ll keep quiet about it. T
That said, the numbers are in my amended contract so they are stuck with it.

@doomaniac – lots of people have no allowance, only ppm payment. Myself included.

I drive a newer and better car because i need it for work. Ergo I factor in the cost of that car.

I *happen* to have the benefit of it at weekends, but we would be a one car family if I didn’t need it for work.