Should I be Paid Mileage Allowance?

Should I be Paid Mileage Allowance?

Mileage allowance is the most common benefit offered to employees in the UK. The guidance regarding the tax treatment of this benefit is complex, but it hinges on a number of easily understandable premises. The first of these is that mileage allowance benefits are just that – benefits. While you are entitled to Tax Relief On Your Mileage, your employer is not under any obligation to pay any set amount.

What Should Employers Pay?

As it stands, employers may, at their discretion, pay mileage allowance at a rate of up to 45 pence per mile* for the first 10,000 miles travelled by an employee. Any mileage over this amount can be reimbursed at a rate of 25 pence per mile. However, the rate at which employers actually pay can vary wildly.

In your case, it would appear that you are not being reimbursed at all. It is important to remember that the 45 pence per mile rate is not necessarily money to which you are entitled – that is, it is not money that either your employer or the taxman is statutorily obliged to part with. Rather, you are entitled to tax relief on a portion of your income equivalent to 45 pence for each of the first 10,000 miles, and 25 pence for each mile after that.

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Tax Relief

The short answer, therefore, is no, your employer does not have to pay you a mileage allowance. However, the taxman offers tax relief on the difference between the rate at which your employer offers reimbursement, and the maximum allowable rate of 45 pence per mile. In your case, they should therefore offer 100% tax relief.

To a certain extent, however, the tax office is right to ask why you are not being offered mileage allowance, particularly given the requirements of your employment. Employers usually find that it is in their interests to offer mileage allowance, particularly if it avoids the necessity to provide a company car fleet. Regardless, aside from the fuel costs you must also consider the cost to you in terms of the depreciation of your vehicle. As such, if you are in a position to do so you may wish to push your employer to begin offering this type of benefit.

*Figures have been updated for this 2011-12 tax year.

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Ask a Question or Comment
FireAnt 24 Feb 2021
Actually, I somewhat disagree with the guidance being provided in this instance. Perhaps when considering ONLY tax-legislation, the writer is correct, however, workers in the UK are entitled to receive at least National Minimum Wage rates for every hour worked (Which incidentally includes travel time where this travel is a requirement of the job; i.e. travel from one building site to the next, not including breaks or commute to/from home/work). When calculating whether NMW has been paid, any expenses made in connection with employment (such as travel expenses, PPE, work-attire, tools & equipment) will be taken off the figure of pay received before the calculation is made... This means that workers who earn a fair bit above NMW and work enough hours may well be able to "absorb" these expenses without falling below NMW. However, a worker who is being paid the NMW rate and where these expenses are not taken into account will end up being underpaid. Therefore, for workers whose ordinary rate is at- or only slightly above- NMW, the employer will have to reimburse expenses / pay an allowance to prevent the worker dipping below NMW.
Robbie 10 Sep 2020
I worked for a company they agreed to pay me 20p per mile and I’ve submitted all the expense forms but they haven’t paid me I keep asking for it and they keep saying it’ll be next week it’s been 6 weeks now what should I do?
pseagraves 10 Aug 2020
I am receiving a small car allowance however my employer is only reimbursing 9p a mile based on an APR rate. Am I right to assume this rate should only be used for employees receiving a company car? The current rate will not cover any maintenance the vehicle requires. Does this mean I'll have to wait till next year to claim back only a portion of this from HMRC? Please help!
Legend 3 Jun 2020
Hi my company are not paying me mileage I'm doing 84 miles a day.They provide me with a works van but can I still claim Mileage ?? They pay the other chap Travel Time.
Ness 17 Apr 2020
I have submitted my mileage allowance form to HMRC and have had notification that I am owed £**** for miles over 10,000. Can you tell me if I get that money as a payment Into my bank or if they take that amount off my tax as they have changed my tax code? Many thanks in advance
Molly 20 Nov 2019
Hi I have been changed from office based to home based by my company. I have been told I cant claim the first 30 miles of my mileage claim everyday when I visit services in my company car. As most of the services in my area are lee than 30 miles this means I will lose out on mileage payments. Is this right
Matt 4 Nov 2019
Hi I receive a car allowance that is paid each month alongside my salary. I also receive a mileage rate of 22p, I have asked hmrc if I can claim the top up to 45p for the first 10,000 miles but they have said I can’t as I have a company car. Is this correct? Can you provide some advice
Jules 24 Jul 2019
Im a carework i dont get paid any mileage i only get 25p per visit but my calls are 5 & 6 miles apart how do i claim some sort of mileage bk
Macspod 31 May 2019
Hi, My employer is applying rules that do not match the HMRC documents regarding what journeys should be paid mileage on. I.e. new rules are deducting the distance from home to the office even if we go tdirect to the clients where the office is defined as our base. As per the Employee Milage 490 document from HMRC this journey would count as we are required to go to client sites as tech support. Can an employer decide what journeys count as qualifying for mileage to be paid or not follow the rules but still pay mileage? I understand that the employer could simply not pay a mileage allowance but can they pick and choose what journeys and rules they decide to follow to pay mileage? MS
Oofus18 15 Jan 2019
My employer pays me 25p per mile but my expenses are fully reimbursable to the client I am currently working for. They charge the client the full 45p. Is this allowed? It doesn’t seem fair that my employer is making a profit on my business expenses.
LucianoA 6 Dec 2018
Hi, My employer doesn't pay any mileage allowance, however they offer a company car scheme. My problem is, if I decline the company car, they don't offer any car allowance nor mileage allowance. In this case, could I claim back using the tax form?
Hellc98 5 Nov 2018
My employer has refused to pay my mileage as they say I have not put my odometer readings on the claim forms. I have always zeroed my milometer at Base before using car for business miles, then record it on my return to Base at the end of the day. They say this is a HMRC requirement. Is this correct?
Daz2005 12 Jul 2018
Should I pay my employees millage for commuting to and from the office in their own vehicle? Or do I just pay from the office to site?
Sean 7 May 2018
Hi. My employer pays mileage at 45p when I start the day at one site and need to travel to another. For two weeks I was temporarily moved to another site which caused my daily commute to go from 4 miles up to 27. I believed I should be paid mileage for the miles over my normal commute but I've been told no because I was just commuting to this other factory. So can an employer choose when to pay for business travel and when not to pay?
Scott 8 Mar 2018
Can my employer charge its client .45p per mile and only reimburse me with .25p per mile. I have no company car or car allowance.
chelskira 6 Mar 2018
Hi, until this year I would claim the .45p per mile upto 10000 miles. Then drop to .25p I had contact from Concur stating that the rate is fixed at .45p regardless of mileage covered. I'm concerned this isn't correct, any thoughts?
Racingman 12 Dec 2017
I was wondering if anyone could assist me with advice, as I have a problem with my Business Mileage expenses and Holiday Pay getting paid from a previous employer. I left a business in October 2017, on leaving I was due mileage expenses and holiday pay, the business is refusing to pay me by saying that they have checked my previous mileage claims and these are incorrect, and I have been overpaid. If I do not drop the claims for my outstanding monies they will report me to HMRC, despite my expenses being authorised by a Director of the business every month for the last 3 years. On the Mileage Expense the issue seems to be the base for my place of work...........Since I started my base has been an office in Preston, I went there in the morning and reported back there at night if I was not out on call. The Director is now saying I had 2 places of business, the manufacturing site in Manchester for which I was responsible for in sales work and the Preston office. In the 3 years I never claimed mileage travelling from my home base to Preston or going back to home but would claim travelling from the likes of the Preston base to Manchester manufacturing and If I spent the day at Manchester I would claim the return journey home, as I did not class Manchester as my base. My question is, can you have 2 places for base when dealing with business mileage, Any advice would be greatly appreciated.
twinkle 16 Oct 2017
im helping a friend at his office , i dont get paid but he says he can pay my mileage, due to disability im unable to work full time nor every day so thus gets me out when im able to. how do i stand tax wise etc
Marti 11 Oct 2017
My employer have sent me and several of my colleagues to support another site which is located closer to our homes. After we came back to permanent workplace we have been informed that our milage wont be covered by employer due to new company policy. In the end all my colleagues been paid 0.35£ per mile and I have been turned down becuase temporary work place is closer than permanent one. HMRC offers to cover business milage but after two months finaly HMRC turned me down because temporary work place is closer to my home than site I have supported and there is not one word about such distance on HMRC site. My questions are : Can my employer turn me down like that when other colleagues live closer to temp site and been paid expenses? Once more I'm highlithing that employer made new policy when I've been already supporting temp site. Also I havn't been offered company car and I don't belive that my employer got right to tell me where I will travel by my own car without paying me expesnse for using it. Kind Regards
ManEng 3 Oct 2017
My company requires me to attenf a training course in Gatwick and offering 30p per mile using my own car travelling to/from Manchester. Is this satisfactory?
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