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Drivers using their own vehicles

Let’s look at the first area, drivers using their own vehicles for company business trips. It has always been the case that a driver’s regular commute does not class as a company business trip.
fuel reinbursement

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13 May 2024

However, the significant increase in home working, or hybrid working, does throw up the interesting question of, “If my staff are officially based at home and I ask them to come into the office on occasions, does that class as a business trip?”

Logic would say that if someone’s contract says they are officially based at home, then yes, a trip into the office could very well be argued as a business trip as the office is not their official place of work.

The decision as to whether you do reimburse your drivers for a trip of that nature is entirely up to you. What is clearer however, are the rates you should refer to when making a decision on the level of reimbursement. Since 2012, the reimbursement rate, or the Approved Mileage Allowance Payments (AMAP) set by the HMRC, has remained unchanged and are as follows:

  • Cars and Vans: 45p per mile up to 10,000 miles
  • Cars and Vans: 25p per mile for anything over 10,000 miles
  • Motorcycle: 24p per mile
  • Cycle: 20p per mile
  • Passengers: There is also an additional 5p per mile claim for every passenger.

You’ll pay tax if you or your family use a company car privately, including
for commuting.

You pay tax on the value to you of the company car, which depends on things like how much it would cost to buy and the type of fuel it uses.

This value of the car is reduced if:

  • You have it part-time
  • You pay something towards its cost
  • It has low CO2 emissions

If your employer pays for fuel you use for personal journeys, you’ll pay tax on this separately.

If you drive a hybrid

If your company car has CO2 emissions of 1 to 50g/km, the value of the car is based on its zero emission mileage figure, or ‘electric range’. This is the distance the car can go on electric power before its batteries need recharging.

There are a couple of things to highlight at this stage, 1. The rates are the same for cars and vans 2. the mileage is cumulative i.e. If a driver changes their vehicle mid-financial year, this will not reset the mileage at zero, they carry from their previous mileage claim. 3. If you are self-employed and use your private car for business trips you can also use the AMAP rates. However, you cannot use AMAP rates AND write off a percentage of running costs and fuel against tax.

It is also worth pointing out at this stage that the AMAP rates are the same for cars, vans any fuel type i.e. Petrol, Diesel, Hybrid PHEV and pure EV. However, if a van driver claims for business use of fuel only, there is no charge, but if they claim for private mileage they are liable to pay the van fuel benefit charge. This charge can be spread across multiple drivers of the same van.

Do you need to stick to the AMAP rates?

The quick answer is no. However, paying a higher rate could result in having to pay additional Class 1 National Insurance.

If you chose to pay your drivers less than the AMAP rate, they can claim tax relief on the shortfall via the HMRC’s Mileage Allowance Relief (MAR) scheme or the Mileage Allowance Relief Optional Reporting Scheme (MARORS).

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Business Motoring

Business Motoring is the motoring resource for small businesses and SME small fleets running company cars and business cars.

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