Mileage rate reduced unexpectedly

[UncleBulgaria]

My company allows us to use our personal vehicles to drive to/from its various offices and claim a mileage rate as compensation.
The rate itself is not specified in my written contract nor is it written in any policy document (policy documents are very few and far between). However, upon starting with the company around 4 years ago I was told the rate to claim was 40p and have been claiming at that rate ever since; claims have always been paid on time without question and I'm aware that other employees claim at the same rate.

Shortly before Christmas I lodged an expenses claim which was rejected, the reason given was that the mileage rate had been reduced to 33p. I objected on the grounds that the change was significant (an approximately 17% reduction) and had not been communicated in advance either to me directly or more generally to me and other members of staff likely to claim mileage expenses. The response from my manager was that he was "happy to pass on your comments", in the mean time my claim (which included other minor cash expenses) remained unapproved.

Last week I asked for an update as I needed the expenses to be paid and was told "An announcement is "imminent" and that "any claim over 33p will be rejected". No announcement has been made to date.

I would like to think that due to the length of time claiming without objection at 40p per mile means that the Company's agreement to recompense at that rate formed an unwritten contract term and to modify this would constitute a change in terms and conditions which would require consultation etc. But am I correct ?

Also, can the Company suddenly start to refuse expense claims without as a minimum communicating the new policy in advance ? My feeling is that they should communicate in advance and only then reduce the rate (subject to the contractual question above).

If anyone has any experience of similar situations or advice on how best to proceed I'd be grateful

Kevin

[leclerc]

Re: Mileage rate reduced unexpectedly

https://www.gov.uk/expenses-and-bene.../rules-for-tax

The above is expenses and business benefits. I think you'd better wait for advice but you might have been incorrectly claiming 40p mileage as it went UP to 45p for the first 10000 miles and then dropped to 25p a mile afterwards....

[UncleBulgaria]

Re: Mileage rate reduced unexpectedly

Thanks Leclerc
I've been claiming 40p per mile from my employer. I'm aware the government MAP is 45p per mile up to 10,000 miles (I do less than 10,000pa).
In theory I could claim the tax back on the 5p difference but I don't bother.
The problem is my employer has suddently decided to only recompense at 33p per mile, a drop of 7p, and is doing so retrospectively - expense claims made in good faith at 40p are being rejected.

[wales01man]

Re: Mileage rate reduced unexpectedly

Is there a reason stated for the reduction after all fuel price has dropped by at least a third over the last year or so .

[UncleBulgaria]

Re: Mileage rate reduced unexpectedly

The reason they've given is standardisation.
The company formed through acquisition of various businesses and, understandably, each came with it's own entrenched policies and procedures. This was around 4 years ago....it's taken a long time for them to "standardise".
I work for the parent of the group, having transferred in from an acquired business a few years ago. Me and some of my fellow staff have been claiming different mileage rates to each other, depending on which acquired company we transferred in from. Some are at 33p, some at 40p, some at 45p.

I can understand the desire to standardise and also the desire to reduce to a lower rate given the drop in petrol costs over the last year.
But to suddenly start rejecting claims without first communicating the change seems wrong - those miles were driven in good faith and with an expectation of 40p recompense. I may have chosen to use alternative transport if I'd known the rate would be lower (then again, I may not).
If the rate change does constitute a change in T's & C's then surely there should be consultation.

If it were a 1p or 2p change (or an increase!) then I'd let it slide, but 7p drop is a very significant 17% and it feels wrong.