Company Car Allowance
Discussion
I am unable to give my daughter the information she requires, so I am hoping that you guys will help me out.
My daughter has a very go job in learning and development in a company I won't name.
For approximately 9 months they have occasionally asked her to travel to locations away from her office for training purposes, this is training other members of staff.
She is asked to forward fund the hotel costs and expenses, and get herself to the location by her own car with reimbursement at 45p per mile.
Additionally she is told that that she must have business mileage insurance for her car, for which she is not reimbursed.
She has asked for car allowance but has been told that this is for managers only, and they have declined to comment any further than you need to be remote training three times a week to be eligible for car allowance, to me this is a hollow target as she is never asked to remote train three times per week, and the logistics of doing so is not possible unless you travel in the evening in your own time.
Her own car is on a lease agreement, and she is racking up the mileage on company business as her contract is only 5000 miles per annum
Any recommendations would be appreciated.
Thanks in advance
My daughter has a very go job in learning and development in a company I won't name.
For approximately 9 months they have occasionally asked her to travel to locations away from her office for training purposes, this is training other members of staff.
She is asked to forward fund the hotel costs and expenses, and get herself to the location by her own car with reimbursement at 45p per mile.
Additionally she is told that that she must have business mileage insurance for her car, for which she is not reimbursed.
She has asked for car allowance but has been told that this is for managers only, and they have declined to comment any further than you need to be remote training three times a week to be eligible for car allowance, to me this is a hollow target as she is never asked to remote train three times per week, and the logistics of doing so is not possible unless you travel in the evening in your own time.
Her own car is on a lease agreement, and she is racking up the mileage on company business as her contract is only 5000 miles per annum
Any recommendations would be appreciated.
Thanks in advance
Be careful asking for a car allowance as with some employers this means that the per mile amount claimable is reduced plus the actual allowance is taxable. On 45p per mile she may actually be financially better off as she is.
How many business miles does she do per year?
How much is the company car allowance?
What is the mileage rate for those with a car allowance?
What is the cost for her to increase the miles on her lease?
Is she a higher rate tax payer?
I think you need some of the answers to these questions to make a properly informed decision.
How many business miles does she do per year?
How much is the company car allowance?
What is the mileage rate for those with a car allowance?
What is the cost for her to increase the miles on her lease?
Is she a higher rate tax payer?
I think you need some of the answers to these questions to make a properly informed decision.
I rent cars for my business travel, and find it works quite well.
The cost of rentals in my situation comes out at less than the mileage money, so it’s a benefit for the business to simply pay for the rentals and fuel.
It also saves me from ruining my own car. Mileage, servicing costs are the obvious things, but the unforeseen things like chipped windscreens and damage.
Pre-Covid the rental company would drop the car to my house and collect it.
I’d also avoid a car allowance as it’s typically not included in the gross income for calculating the pension contribution.
The cost of rentals in my situation comes out at less than the mileage money, so it’s a benefit for the business to simply pay for the rentals and fuel.
It also saves me from ruining my own car. Mileage, servicing costs are the obvious things, but the unforeseen things like chipped windscreens and damage.
Pre-Covid the rental company would drop the car to my house and collect it.
I’d also avoid a car allowance as it’s typically not included in the gross income for calculating the pension contribution.
dadofbud said:
For approximately 9 months they have occasionally asked her to travel to locations away from her office for training purposes, this is training other members of staff.
She is asked to forward fund the hotel costs and expenses, and get herself to the location by her own car with reimbursement at 45p per mile.
Additionally she is told that that she must have business mileage insurance for her car, for which she is not reimbursed.
She has asked for car allowance but has been told that this is for managers only, and they have declined to comment any further than you need to be remote training three times a week to be eligible for car allowance, to me this is a hollow target as she is never asked to remote train three times per week, and the logistics of doing so is not possible unless you travel in the evening in your own time.
Her own car is on a lease agreement, and she is racking up the mileage on company business as her contract is only 5000 miles per annum
Any recommendations would be appreciated.
Thanks in advance
Is this travel mentioned in her contract?She is asked to forward fund the hotel costs and expenses, and get herself to the location by her own car with reimbursement at 45p per mile.
Additionally she is told that that she must have business mileage insurance for her car, for which she is not reimbursed.
She has asked for car allowance but has been told that this is for managers only, and they have declined to comment any further than you need to be remote training three times a week to be eligible for car allowance, to me this is a hollow target as she is never asked to remote train three times per week, and the logistics of doing so is not possible unless you travel in the evening in your own time.
Her own car is on a lease agreement, and she is racking up the mileage on company business as her contract is only 5000 miles per annum
Any recommendations would be appreciated.
Thanks in advance
How often is “occasionally”?
My interpretation of “occasionally” is a few times.
Without knowing regularity, I would say she should be provided with a car for these occasional trips, rather than a car allowance.
This should be in the form of a rental car, for which she claims back fuel at cost.
This is how it works at my company. Employees without a company car or allowance are expressly forbidden to use their own car.
Simple, polite conversation with management I think, if using one’s own car was not part of the arrangement when the job was taken.
dadofbud said:
She is asked to forward fund the hotel costs and expenses, and get herself to the location by her own car with reimbursement at 45p per mile.
Additionally she is told that that she must have business mileage insurance for her car, for which she is not reimbursed.
The 45p/mile is for fuel, wear and tear, business insurance costs etc. Not just for fuel. Additionally she is told that that she must have business mileage insurance for her car, for which she is not reimbursed.
All sounds pretty normal for me, in the context of grown-ups in professional jobs.
Be aware that the HMRC rate drops from 45p or so to about half that after IIRC 10k miles in a tax year.
some companies make you use a hire car for trips where it works out cheaper, more than x miles in a day.
It comes down to job description really, what do people 'sign up to'?
Be aware that the HMRC rate drops from 45p or so to about half that after IIRC 10k miles in a tax year.
some companies make you use a hire car for trips where it works out cheaper, more than x miles in a day.
It comes down to job description really, what do people 'sign up to'?
Not sure there's an issue here, 45p mile for the first 10k miles is fine.
Getting a lease for only 5k PA is the issue, but even then, what are the excess mileage charges on the agreement?
Depending on the car, it may be costing her 20p mile in fuel, 15p a mile in excess mileage charges, business cover is here nor there. If she's getting 45p/mile (guess she's driving less than 10k PA on business), then that leaves her with around 10p/mile to cover wear & tear (@10k PA that is another £1,000 PA)..
Getting a lease for only 5k PA is the issue, but even then, what are the excess mileage charges on the agreement?
Depending on the car, it may be costing her 20p mile in fuel, 15p a mile in excess mileage charges, business cover is here nor there. If she's getting 45p/mile (guess she's driving less than 10k PA on business), then that leaves her with around 10p/mile to cover wear & tear (@10k PA that is another £1,000 PA)..
Teebs said:
....
Getting a lease for only 5k PA is the issue, but even then, what are the excess mileage charges on the agreement?...
Indeed. That's the downside of leasing, you pick a low mileage to get a cheap deal and then your circumstances change and you have to pay the excess mileage. Getting a lease for only 5k PA is the issue, but even then, what are the excess mileage charges on the agreement?...
The rental car suggestion is worth investigating further, if the company is big enough then they probably have a discount code setup with one of the big chains.
To further confirm, the arrangement the company has put in place is perfectly acceptable and unless your daughter is driving a '78 Trans Am, she should actually gain slight advantage from it.
Car Allowances and Company Cars only make sense if you're racking upwards of 20k/30k miles a year for work.
One thing to be aware of though - not directly related to the car issue but still relevant - is the time she takes to travel to the venue. There was a change in the legislation some time ago that required employers to count travel time in situations like this as part of the working week. So, if she spends 1.5 hours driving somewhere, does a full 9-5, then 1.5 hours driving home, those 3 hours have to either be paid for or taken from somewhere else - unless she opts out of the requirement. I forget the exact name of the law but it relates to the section of the contract that talks about 'The Normal Place of Work'.
Car Allowances and Company Cars only make sense if you're racking upwards of 20k/30k miles a year for work.
One thing to be aware of though - not directly related to the car issue but still relevant - is the time she takes to travel to the venue. There was a change in the legislation some time ago that required employers to count travel time in situations like this as part of the working week. So, if she spends 1.5 hours driving somewhere, does a full 9-5, then 1.5 hours driving home, those 3 hours have to either be paid for or taken from somewhere else - unless she opts out of the requirement. I forget the exact name of the law but it relates to the section of the contract that talks about 'The Normal Place of Work'.
As others have said, I've found that adding business class 1 insurance adds nothing to my policy (although I'm pushing 40, bit different if younger possibly). A mate of mine binned a car years ago visiting a client so I've always had it since, even though I do little business mileage these days.
I have a car allowance - it's pretty good, but it means I can only claim 10p/mile or so now for business mileage as opposed to 45p/mile if I didn't have it. It's also non contractual and isn't pensionable income.
In this case, I'd probably either ask for a pay rise for the additional duties (and take the 45p/mile) or a rental car. I suspect the option might be to take the 45p/mile and that'll be it, in which case the options are either to suck it up, or walk.
I have a car allowance - it's pretty good, but it means I can only claim 10p/mile or so now for business mileage as opposed to 45p/mile if I didn't have it. It's also non contractual and isn't pensionable income.
In this case, I'd probably either ask for a pay rise for the additional duties (and take the 45p/mile) or a rental car. I suspect the option might be to take the 45p/mile and that'll be it, in which case the options are either to suck it up, or walk.
dadofbud said:
I am unable to give my daughter the information she requires, so I am hoping that you guys will help me out.
My daughter has a very go job in learning and development in a company I won't name.
For approximately 9 months they have occasionally asked her to travel to locations away from her office for training purposes, this is training other members of staff.
She is asked to forward fund the hotel costs and expenses, and get herself to the location by her own car with reimbursement at 45p per mile.
Additionally she is told that that she must have business mileage insurance for her car, for which she is not reimbursed.
She has asked for car allowance but has been told that this is for managers only, and they have declined to comment any further than you need to be remote training three times a week to be eligible for car allowance, to me this is a hollow target as she is never asked to remote train three times per week, and the logistics of doing so is not possible unless you travel in the evening in your own time.
Her own car is on a lease agreement, and she is racking up the mileage on company business as her contract is only 5000 miles per annum
Any recommendations would be appreciated.
Thanks in advance
As others have said in a lot of organisations (especially public sector) the above is fairly normal/standard. In terms of the forward funding hotel and expenses - if this is a regular thing then they should either give her a float (e.g. £500) which gets reimbursed each time she puts in a claim or they should give her a Company credit card. However it's down to the discretion of the company.My daughter has a very go job in learning and development in a company I won't name.
For approximately 9 months they have occasionally asked her to travel to locations away from her office for training purposes, this is training other members of staff.
She is asked to forward fund the hotel costs and expenses, and get herself to the location by her own car with reimbursement at 45p per mile.
Additionally she is told that that she must have business mileage insurance for her car, for which she is not reimbursed.
She has asked for car allowance but has been told that this is for managers only, and they have declined to comment any further than you need to be remote training three times a week to be eligible for car allowance, to me this is a hollow target as she is never asked to remote train three times per week, and the logistics of doing so is not possible unless you travel in the evening in your own time.
Her own car is on a lease agreement, and she is racking up the mileage on company business as her contract is only 5000 miles per annum
Any recommendations would be appreciated.
Thanks in advance
What's the mileage penalty on the lease arrangement? Can she renegotiate this?
Unless you go for an EV, it's unlikely a company car will be worth it.
Would be worth calling the leasing company and finding out how much it costs to increase the mileage allowance.
Could she use the train and taxi, then claim back that cost?
To be fair, I don't think her employer is doing anything wrong, and this arrangement is pretty usual.
Would be worth calling the leasing company and finding out how much it costs to increase the mileage allowance.
Could she use the train and taxi, then claim back that cost?
To be fair, I don't think her employer is doing anything wrong, and this arrangement is pretty usual.
hepy said:
Unless you go for an EV, it's unlikely a company car will be worth it.
This isn't true. It purely depends on the individual details. But a small petrol car as a company car can still be a great money saver, in the right circumstances. If the OP's daughter is a younger driver, living in a city, her personal insurance costs could be very expensive. So she'll be getting insurance included with a company car. So a non EV might be a worth it, but might not be.
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