Company Expenses Remuneration

[mrpoorman]

I work at a car dealership. I pay company car tax for my demo and I fuel it myself.

When it is used for business purposes, like being loaned to a customer or used for a test drive, I have to complete an expenses claim form and state the milsage the customer did so that I can be reimbursed for the fuel. This is fairly easy to do as the car logs all journeys and this data can be accessed via an app. The problem is that the company reimburses me at 12p per mile but the actual cost is 17p per mile.

It appears that the company use the official manufacturer mpg figure whilst I am using the real world figure as shown on the trip computer in the car and also on the app as it shows the consumption for every single journey. There is a difference of 15mpg between manufacturer figure and real world figure.

I have raised this and was told that this rate of 12p is set by HMRC and there was some waffle about benefit in kind!?!?!

I don't care who set the rate, I shouldnt be out of pocket by 5p for every mile my car is driven for business purposes. Thats £20 per tank of fuel. My claim so far for this month stands at around £66 so that is leaving me £27.50 out of pocket for this month.

[ULA]

Can you confirm what the cc is of your company car. Many thanks

[mrpoorman]

The actual car I drive varies as we use an averaging scheme.

Typically it would be 1999cc which on expenses would pay me 11p per mile but I was told to pick the over 2000cc dropdown so it pays me 12p.

[ULA]

The Advisory Fuel Rates for reimbursement to employees for business travel in a company provided vehicle where the employee pays for fuel is provided by HMRC. Here is a link to the rates both current and historical (ignore the link titles they are a bit misleading).

https://www.gov.uk/government/publications/advisory-fuel-rates/advisory-fuel-rates-1-september-2011-to-29-february-2016

New rates are applicable from 1 June 2018.

https://www.gov.uk/government/publications/advisory-fuel-rates/advisory-fuel-rates-from-1-march-2016

Rates are calculated based on fuel prices and adjusted miles per gallon figures.

In regard to what your company has stated about benefits in kind they are correct. If a company pays a rate per mile for business travel higher than the Advisory Fuel Rates, then unless the company can demonstrate that the fuel cost per mile is higher, any additional paid will be counted as a Benefit in Kind to you and will therefore need to be reported on your annual P11D.

[mrpoorman]

I read that earlier.

So my understanding would be that if the company wanted to reimburse me the actual cost per mile then all they need to do is demonstate that the fuel cost per mile is higher than the HMRC advisory rate? So a screenshot of the customers journeys in the car showing how many miles and the mpg achieved for the journey along with a fuel receipt showing cost per litre should suffice?

[ULA]

Sorry but this is now into HMRC requirement territory and I cannot confirm whether your suggestion of possible proof would be adequate or acceptable to HMRC.

HMRC may require the company to apply for some form of written dispensation from them or be required to have some specific detailed documentation (as maybe set out by HMRC) to support paying any rate higher than the AFR. Alternatively, the company may just need to be able to prove that there is evidence based proof to the payment of the higher rate AFR in which case what you are proposing may suffice.

I would suggest that maybe you discuss the option you have detailed with your company and see if they are happy to pay a higher rate than the AFR on the proof you are suggesting.