Mileage rates with salary sacrifice?
Discussion
We're looking at maybe taking up the NHS salary sacrifice scheme, but I've a question about mileage rates.
As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
Fastlane said:
Salary sacrifice means it's your car and so you can claim up to 45p per mile. Whether they pay that or not us up to them.
4p per mile is for company provided cars only.
That's my understanding as well. Another way to look at it is the mileage rate covers depreciation. If you're effectively paying the depreciation then you're entitled to claim the 45ppm rate. OTOH if it's a company car you can only claim for the fuel (because you're not paying for insurance, road tax depreciation).4p per mile is for company provided cars only.
Depends on the company.
My company regard salary sacrifice cars as company cars, as the only people who have them are funded for them with a car allowance. So they only pay the fuel advisory rate (4p in the case of EVs)
Again for my company, if you have an allowance and buy your own, they still only pay fuel advisory rate as they regard the allowance as funding the purchase and running costs. The only people who can claim 45p are those who don’t have an allowance and use their own car for business.
This is a large global IT consultancy, so I’m fairly sure they’re doing things by the book.
What I slowly getting at, is check your terms of employment rather than an Internet forum. A company is able to reimburse whatever they like for fuel. Advisory rates are just that - advisory.
My company regard salary sacrifice cars as company cars, as the only people who have them are funded for them with a car allowance. So they only pay the fuel advisory rate (4p in the case of EVs)
Again for my company, if you have an allowance and buy your own, they still only pay fuel advisory rate as they regard the allowance as funding the purchase and running costs. The only people who can claim 45p are those who don’t have an allowance and use their own car for business.
This is a large global IT consultancy, so I’m fairly sure they’re doing things by the book.
What I slowly getting at, is check your terms of employment rather than an Internet forum. A company is able to reimburse whatever they like for fuel. Advisory rates are just that - advisory.
Edited by CheesecakeRunner on Saturday 12th December 17:54
Countdown said:
Fastlane said:
Salary sacrifice means it's your car and so you can claim up to 45p per mile. Whether they pay that or not us up to them.
4p per mile is for company provided cars only.
That's my understanding as well. Another way to look at it is the mileage rate covers depreciation. If you're effectively paying the depreciation then you're entitled to claim the 45ppm rate. OTOH if it's a company car you can only claim for the fuel (because you're not paying for insurance, road tax depreciation).4p per mile is for company provided cars only.
Mine only pays 29p.
I do claim back tax on the remainder each year which usually adds up to a bit.
Countdown said:
Fastlane said:
Salary sacrifice means it's your car and so you can claim up to 45p per mile. Whether they pay that or not us up to them.
4p per mile is for company provided cars only.
That's my understanding as well. Another way to look at it is the mileage rate covers depreciation. If you're effectively paying the depreciation then you're entitled to claim the 45ppm rate. OTOH if it's a company car you can only claim for the fuel (because you're not paying for insurance, road tax depreciation).4p per mile is for company provided cars only.
As it's a company car there's no 45p mileage claims available. We were certainly told that this is an HMRC thing, not a company thing, so should apply everywhere. That said, I can't afford one of our salary sacrifice cars as they're so bloody expensive even on 0%BIK, so I never looked into it any further.
OP - I'd ask the HR people and get it in writing if I were you before committing to this.
sawman said:
Depends on the nhs trust. At my place if you have a salary sacrifice lease you get about double the owner driver rate, and if the lease is an EV you can charge it more or less for free at work.
I can't even begin to make sense of why they'd voluntarily want to pay someone who's already getting the benefit of salary sacrifice double the mileage rate of someone who has to run their own car.What I said above is wrong. A salary sacrifice car is treated as a company car by HMRC https://www.clm.co.uk/company-car-tax/#:~:text=Pri...
Therefore the advisory fuel rate 4p/mile - anything more than that will be considered as a benefit-in-kind and will be reportable on your P11D and therefore taxable.
Therefore the advisory fuel rate 4p/mile - anything more than that will be considered as a benefit-in-kind and will be reportable on your P11D and therefore taxable.
Blue Oval84 said:
I can't even begin to make sense of why they'd voluntarily want to pay someone who's already getting the benefit of salary sacrifice double the mileage rate of someone who has to run their own car.
They are trying to effect behaviour change - if all of the staff are driving around in EVs the net carbon liability (or whatever its called ) is reduced. Which i believe is helpful to the organisation. However the trust run a huge national leasing scheme this rate differential pre dated EVs as the trust were keen to get as many staff on the lease as possible. The EV charging is just another incentive (however long it lasts) I currently get 28p per mile for my own petrol car whilst my work pal gets 45 - 50 (not sure of actual number) for their sal sacrifice mini hybrid Edited by sawman on Sunday 13th December 11:14
Edited by sawman on Sunday 13th December 11:15
TooLateForAName said:
We're looking at maybe taking up the NHS salary sacrifice scheme, but I've a question about mileage rates.
As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
Where are you getting the 45p from? That's the HMRC rate for tax reclaim for using your own car. The Trust may pay the same amount, but they may not. As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
One of my daughters works in the NHS and she gets an odd rate - I have it in my head it's 56p - for using her own car. No idea how they're able to pay more than HMRC rate and it not be taxable. Again, from memory, it's quite limited in mileage - 4K/yr maybe.
Are you sure her mileage is claimable? HMRC may regard them as two regular workplaces - I recall there was a business mileage case for a Consultant who worked in two hospitals and he lost.
Sheepshanks said:
TooLateForAName said:
We're looking at maybe taking up the NHS salary sacrifice scheme, but I've a question about mileage rates.
As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
Where are you getting the 45p from? That's the HMRC rate for tax reclaim for using your own car. The Trust may pay the same amount, but they may not. As I understand it, if we use our own car we can claim the 45p for the first 10,000 business miles but if we have a lease car ev then the hmrc rate is only 4p/mile.
Does a car leased on salary sacrifice count as 'our' car or a company car?
It matters because due to recruitment issues in her trust my wife is currently travelling about 150 miles a go to cover a location with no consultants. I can see this being done twice a week next year.
One of my daughters works in the NHS and she gets an odd rate - I have it in my head it's 56p - for using her own car. No idea how they're able to pay more than HMRC rate and it not be taxable. Again, from memory, it's quite limited in mileage - 4K/yr maybe.
Are you sure her mileage is claimable? HMRC may regard them as two regular workplaces - I recall there was a business mileage case for a Consultant who worked in two hospitals and he lost.
https://www.gov.uk/expenses-and-benefits-business-...
Pica-Pica said:
Anything above the HMRC rate (45p) is taxable and declarable, and that rate reduces above 10k miles per year. Most Trusts have dropped the payment rate below 45p.
https://www.gov.uk/expenses-and-benefits-business-...
Maybe this is some NHS specific deal as it's limited to 3500 miles (not 4K as I thought earlier) then it drops a lot - she's been told it's not taxable https://www.rcn.org.uk/employment-and-pay/nhs-mile...https://www.gov.uk/expenses-and-benefits-business-...
In practice she doesn't claim it and she doesn't think anyone she works with does - they don't do many miles between clinics and in her busy life it's not important enough to spend time on.
Sheepshanks said:
Pica-Pica said:
Anything above the HMRC rate (45p) is taxable and declarable, and that rate reduces above 10k miles per year. Most Trusts have dropped the payment rate below 45p.
https://www.gov.uk/expenses-and-benefits-business-...
Maybe this is some NHS specific deal as it's limited to 3500 miles (not 4K as I thought earlier) then it drops a lot - she's been told it's not taxable https://www.rcn.org.uk/employment-and-pay/nhs-mile...https://www.gov.uk/expenses-and-benefits-business-...
In practice she doesn't claim it and she doesn't think anyone she works with does - they don't do many miles between clinics and in her busy life it's not important enough to spend time on.
https://www.nhsemployers.org/tchandbook
Interestingly the link for the Health in Wales website DOES refer to HMRC rates and limits.
She should double-check about the taxation issue with her employers.
Sheepshanks said:
Where are you getting the 45p from? That's the HMRC rate for tax reclaim for using your own car. The Trust may pay the same amount, but they may not.
One of my daughters works in the NHS and she gets an odd rate - I have it in my head it's 56p - for using her own car. No idea how they're able to pay more than HMRC rate and it not be taxable. Again, from memory, it's quite limited in mileage - 4K/yr maybe.
Are you sure her mileage is claimable? HMRC may regard them as two regular workplaces - I recall there was a business mileage case for a Consultant who worked in two hospitals and he lost.
This is very much my OH helping out the trust which otherwise would not be able to provide services. 45p is what they are currently paying. She has reduced PAs in her actual location and is providing cover to 2 other clinics which haven't been able to recruit. One of my daughters works in the NHS and she gets an odd rate - I have it in my head it's 56p - for using her own car. No idea how they're able to pay more than HMRC rate and it not be taxable. Again, from memory, it's quite limited in mileage - 4K/yr maybe.
Are you sure her mileage is claimable? HMRC may regard them as two regular workplaces - I recall there was a business mileage case for a Consultant who worked in two hospitals and he lost.
When I was a freelance IT bod there was a rule on temporary workplaces that you could claim expenses for 18months before it became a regular workplace. I guess I need to revisit this, because the travel time+ car costs + overnight stays are a drag and if it isn't being paid for appropriatly then she should just go back to spending all her time at the clinic she works at.
The 4p and 45p rates are the tax thresholds. Salary sacrifice results in 4p for an EV.
Company can pay what they want but if they pay you more that that, the difference is taxable. It may be taxed at source. For simplicity companies typically pay the hmrc tax thresholds to company car owners but it’s not obligatory.
Worth noting with salary sacrifice and the nhs is it can bugger up your pension, it’s certainly worth checking for implications.
Company can pay what they want but if they pay you more that that, the difference is taxable. It may be taxed at source. For simplicity companies typically pay the hmrc tax thresholds to company car owners but it’s not obligatory.
Worth noting with salary sacrifice and the nhs is it can bugger up your pension, it’s certainly worth checking for implications.
TooLateForAName said:
This is very much my OH helping out the trust which otherwise would not be able to provide services. 45p is what they are currently paying. She has reduced PAs in her actual location and is providing cover to 2 other clinics which haven't been able to recruit.
When I was a freelance IT bod there was a rule on temporary workplaces that you could claim expenses for 18months before it became a regular workplace. I guess I need to revisit this, because the travel time+ car costs + overnight stays are a drag and if it isn't being paid for appropriatly then she should just go back to spending all her time at the clinic she works at.
If your OH is a medic, you should check out the BMA website for reimbursement info. It is different to the link posted earlier for agenda for change staff.When I was a freelance IT bod there was a rule on temporary workplaces that you could claim expenses for 18months before it became a regular workplace. I guess I need to revisit this, because the travel time+ car costs + overnight stays are a drag and if it isn't being paid for appropriatly then she should just go back to spending all her time at the clinic she works at.
Bear in mind that the salary sacrifice deal is usually 2 or 3 years, if mileage drops when she returns to normal work pattens the drop in milage isnt an issue but if it goes the other way, like any lease deal there are penaltys
Heres Johnny said:
The 4p and 45p rates are the tax thresholds. Salary sacrifice results in 4p for an EV.
Company can pay what they want but if they pay you more that that, the difference is taxable. It may be taxed at source. For simplicity companies typically pay the hmrc tax thresholds to company car owners but it’s not obligatory.
Ahah, you raise a good point. Those whose NHS trust pay more, such as the 56p quotes above, are you paid the mileage through payroll, or via expense claims? Because if through payroll, you’ll pay tax on it. And 56p -20% is just under 45p. Company can pay what they want but if they pay you more that that, the difference is taxable. It may be taxed at source. For simplicity companies typically pay the hmrc tax thresholds to company car owners but it’s not obligatory.
The 18 month thing quotes above is actually 24 months. Imaginatively called the 24 Month Rule :-)
https://www.gov.uk/hmrc-internal-manuals/employmen...
Basically you can claim expenses to a temp workplace for up to 24 months, or up to the point at which you know you’ll be working there for more than 24 months, then it becomes a normal place of work and you can’t claim commuting costs. Or rather you can, but the expenses would become taxable benefit. Some organisations work around this by continuing to pay expenses but at a higher level that negates the tax burden on the employee, so they’re not out of pocket.
sawman said:
Blue Oval84 said:
I can't even begin to make sense of why they'd voluntarily want to pay someone who's already getting the benefit of salary sacrifice double the mileage rate of someone who has to run their own car.
They are trying to effect behaviour change - if all of the staff are driving around in EVs the net carbon liability (or whatever its called ) is reduced. Which i believe is helpful to the organisation. However the trust run a huge national leasing scheme this rate differential pre dated EVs as the trust were keen to get as many staff on the lease as possible. The EV charging is just another incentive (however long it lasts) I currently get 28p per mile for my own petrol car whilst my work pal gets 45 - 50 (not sure of actual number) for their sal sacrifice mini hybrid Edited by sawman on Sunday 13th December 11:14
Edited by sawman on Sunday 13th December 11:15
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