TAX Deductions from Business Mileage when cycling to work

General cycling advice ( NOT technical ! )
meconvery
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TAX Deductions from Business Mileage when cycling to work

Postby meconvery » 25 Apr 2019, 1:56pm

HI Collective

I have just started a new job and they have a policy where they remove your commuter mileage from your business mileage when you put an expenses claim in (this is in a car) as they say other wise it will be a benefit. This is a bit of an issue for me as I never drive when commuting, I usually cycle then failing that I get a lift or take the train. To make it sting a bit more the distance to the office when driving is double that on my bike (due to access across a canal) which effectively means I am handing my employer £12 quid every time I use my car for business which certainly adds up over a month. My employer agrees this is a bit unfair but will only change the policy after conformation with the HRMC which is not an easy thing to get...

Any one out there know what the tax situation is and best way to get a reply out of HRMC?

RobinS
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby RobinS » 25 Apr 2019, 2:16pm

The tax free mileage allowance is based the distance from your place of work to the places visited in the course of your duties. Travel between your home and normal place of work is specifically excluded. If your employer was to pay you for driving (or cycling) to your place of work it would be a taxable benefit.

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geomannie
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby geomannie » 25 Apr 2019, 2:32pm

I don't fully understand. You don't use the car to get to work so where does your car journey start from when you use a car for work?

In any case, at face value this sounds like the problem is with the employer not HMRC. If they are making deductions for car commuting that you haven't made, that is simply wrong.

I suggest that your employer has a rigid process and are reluctant to change for operational reasons.
geomannie

AndyK
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby AndyK » 25 Apr 2019, 2:57pm

HMRC runs regular webinars on subjects like this for employers. Personally I find them tedious (I'd rather have it in writing), but they can be informative and there is an opportunity to ask questions of the presenters during the webinar. It might be quicker than waiting for a reply through the usual channels. See https://register.gotowebinar.com/rt/381 ... ign-Apr-13

FWIW, as far as I can see from the HMRC guidance online, your employer is misinterpreting the rules in any case where you're driving straight from home to the meeting (or whatever) without going via your normal workplace. But IANATA (I Am Not A Tax Accountant).

tatanab
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby tatanab » 25 Apr 2019, 3:00pm

geomannie wrote:I don't fully understand. You don't use the car to get to work so where does your car journey start from when you use a car for work?.
Easy, the company assumes that you will travel directly from home on the business trip, not go to the office first. Hence they deduct your normal commuting mileage otherwise they would be paying you for something not normally paid. This all makes sense for somebody who usually drives the commute to work - i.e the way the company thinks. To be able to change this you would have to prove to the company that you ALWAYS commute by other means. HMRC will not be interested, again unless you can prove absolutely that you NEVER drive the commute to work.

I worked in a company with this policy in 2000 and just sucked it up; I travelled for business only once or twice a month usually. 30 years ago I worked for a company whose policy was that you travelled in your own time - which is much worse, hence your business travel time was unpaid. I might drive to an airport, fly 12 hours, drive to a hotel - all unpaid. Fortunately they changed that policy because too many fat cats complained.

meconvery
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby meconvery » 25 Apr 2019, 3:48pm

I can fully vouch that I have never driven to my office purely for commuting. When not cycling I get a lift as my partner works less than a mile away or I get the train which is only a 10 min ride as appose to a 40 min car journey so its a no brainer.

On a different note virtually none of my business trips would take me past the office anyway, my sites are all in the same direction as my house.

Think I am just going to have to write to HRMC and hope for a reply.

In case you think I am being frivolous and should suck it up, the deductions equaled a quarter of my disposable income last month so its a big issue for me.

RobinS
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby RobinS » 25 Apr 2019, 4:02pm

Ah, so if I get you right, if working in the office you cycle. If out visiting other sites you drive directly there from home, and back to home? If this is the case he HMRC will accept your employer paying you mileage (at 45per mile) of the actual distance covered, or the distance from your office to sites visited, whichever is the less.
It is up to your employer whether they actually pay this or not, and no business of HMRC.
If you actually visit the office on days you drive they are correct not to pay mileage for the home to office element - HMRC will regard that as a benefit regardless of how you might get there other days.

PH
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby PH » 25 Apr 2019, 5:11pm

meconvery wrote:I am handing my employer £12 quid every time I use my car for business which certainly adds up over a month.

Is that £12 the cost of taking your car to work? If so, as a worse case scenario, there's nothing stopping your employer paying it and counting it as a benefit, your loss would then be the tax paid, so £3.60?

Vitara
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby Vitara » 25 Apr 2019, 7:45pm

My employer does the same & I concur with AndyK, they are misinterpreting the rules. In my own case I'm pretty sure this is a deliberate misinterpretation as it works in the organisations interest.

From my own study of the rules.

Travel for work can be claimed tax free up to the HMRC level (45p/mile I think), this takes into account not only fuel costs but car running costs. In theory the amount you are re-imbursed should cover your costs but not leave you in profit (1)

If your employer pays more than the HMRC amount you will be taxed on it. This makes sense otherwise there would be a loophole where you could have a salary of say £1,200/PA boosted by a tax free mileage allowance of £100/mile.

Your employer could also choose to re-imburse your commuting travel costs, but these are taxed as they would be a benefit in kind. Again if this wasn't the case it would allow a loophole of employers offering an annual salary of £1,200 but hey we'll pay you're travel to work costs at £100/mile.

So in most cases you travel to work at your own expense, then any work mileage during work time is claimable up to HMRC limits, and travel home is at your own expense.

This is fine if you always have to go to your place of work, or your journey takes you close to it. It falls down when you are travelling in a different direction or in my case are expected to do visits on the way to or from the work office.

HMRC allows for this, words to the effect of “you can claim providing the meeting you are attending is genuine”. As I understand if you have a genuine 9am meeting half way between home and work, you can start claiming from the meeting onwards. Genuine meeting being just that & not meeting your buddy at Costa Coffee for a Pseudo meeting to get round the tax rules.

In my case what my colleagues & I are often asked to do is to start doing visits on my way to work, and fit in some more on our journey home. This made sense in that we have a shorter journey to our first visit, our working day is more efficient and you may be closer to home after your last visit and at the end of your working day. All well and good, except you are visiting using your own vehicle but can't start claiming for it until you have completed your commuting mileage.

Worse case scenario, you could end up using your car all day, vehicle punishing short stop start visits, driving 30+miles but only end up being able to claim back for a couple of miles work travel.

It was clear to me the HMRC regs were being wrongly interpreted & I argued the case vociferously but was met with indifference. The answer for me was easy, “sorry I'm not able to do visits on my way to or from work, I'll come to the office first & pick up my visit list and supplies, do my visits and come back to clock off before I start my commute home”. This may, or may not, work for you.

As above I'm also not a Tax Accountant, so happy to be corrected if I've got this wrong.

(1) If you choose to own a Citroen C1/Toyota Aygo or similar the allowance will easily cover your costs.

fastpedaller
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Re: TAX Deductions from Business Mileage when cycling to work

Postby fastpedaller » 25 Apr 2019, 9:59pm

Just use the bike to visit clients!
I once worked for (a company with a well known 'generic' product) that should have known better...... They asked me to visit another of their sites for stocktake purposes, no problem except that it was just twice a year, and I didn't have business use insurance on the car, or want to stump up the cost of adding it. They would pay mileage, but only if I used the car, and wouldn't pay for the business part of the insurance to be added. They suggested that if I used my car and anything happened they would say I wasn't on company business this pretty much astounded me, and I put it to them "what if a company truck reversed into my car in the car park at the other site? that would be a bit difficult to wriggle out of". I used the bike instead. When we all left the site to return to base, I chose a 'carefully selected route' and got back before the motorists :D . On subsequently trying to claim mileage I was told I had no expense because I'd used the bike, so I suggested to the supervisor that the others chose a slower mode of transport, so should be taken to task for not using bikes! The union backed me (on the mileage claim), on the basis I should have been paid the equivalent bus fare, but the company wouldn't budge.
At the next stock take I returned to base by a carefully selected route again, this time adding in another 20 miles training :lol: Nothing was said.

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gaz
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Re: TAX Deductions from Buisness Miliage When cycling to Work

Postby gaz » 25 Apr 2019, 11:00pm

Vitara wrote:... you are visiting using your own vehicle but can't start claiming for it until you have completed your commuting mileage.

Describes fairly well my own employer's interpretation of the rules, although in practice for myself it is more about occasional attendance at a different office or conference/training venue than visiting clients.

My employer also states that they pay such expenses in accordance with HMRC vehicle rates, but the claim process makes no mention of cycling. Curiously the use of motor cycles for such trips is barred.

Fortunately public transport costs are paid in full, for me this becomes the simple choice. The only thing that grates in this case is that should I choose to use my folding bike on a cycle-train-cycle style journey the trip has always been shorter than my trip to work, hence no opportunity to even try to claim cycle mileage.

If I take a taxi from the station to the venue I can claim back the fare but where's the fun in that.
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Paulatic
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Re: TAX Deductions from Business Mileage when cycling to work

Postby Paulatic » 25 Apr 2019, 11:09pm

fastpedaller wrote:Just use the bike to visit clients!
.


You should receive 20p/ ml for that. :D
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[XAP]Bob
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Re: TAX Deductions from Business Mileage when cycling to work

Postby [XAP]Bob » 26 Apr 2019, 7:51am

Normal mileage claims have always been distance from the office.
Although ‘actual distance’ is also valid.

I’ve been paid both ways in the past. But if all the sites are ‘your’ side of the office then claim the mileage from the office... that explicitly excludes any commuting distance already.
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Lance Dopestrong
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Re: TAX Deductions from Business Mileage when cycling to work

Postby Lance Dopestrong » 26 Apr 2019, 9:59am

meconvery wrote:HI Collective

I have just started a new job and they have a policy where they remove your commuter mileage from your business mileage when you put an expenses claim in (this is in a car) as they say other wise it will be a benefit. This is a bit of an issue for me as I never drive when commuting, I usually cycle then failing that I get a lift or take the train. To make it sting a bit more the distance to the office when driving is double that on my bike (due to access across a canal) which effectively means I am handing my employer £12 quid every time I use my car for business which certainly adds up over a month. My employer agrees this is a bit unfair but will only change the policy after conformation with the HRMC which is not an easy thing to get...

Any one out there know what the tax situation is and best way to get a reply out of HRMC?


Am I correct in thinking that you normally commute by bicycle, and you only use the car to commute when you need it to subsequently go out during the working day in it? Therefore, it's a motorised commute you would not ordinarily make, so you're subsiding your employer each time to the cost of a commute that you've only made in the car in order to suit their needs?

I think I know the answer I'd give to that if they tried it with me and didn't compensate me in some way.
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Oldjohnw
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Re: TAX Deductions from Business Mileage when cycling to work

Postby Oldjohnw » 26 Apr 2019, 1:55pm

My understanding is that you can make an 'actual' claim to HMRC if you feel you are not well served by your employer. You set your motoring costs against receipts then apportion business mileage. The net cost becomes tax deductible (or profit becomes chargeable).
John

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