Falling HMRC Fuel Rates – are your claims right? 1

mann im auto

The rates only apply when you either:

  • reimburse employees for business travel in their company cars
  • require employees to repay the cost of fuel used for private travel

If you pay a rate per mile for business travel no higher than the AFR, for the particular engine size and fuel type, HM Revenue and Customs (HMRC) will accept there is no taxable profit and no Class 1A National Insurance to pay.

You can use your own rates which better reflect your circumstances if, for example, your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates.

Advisory Fuel Rates from 1 March 2015

These rates applied from 1 March 2015. You can use the previous rates for up to 1 month from the date the new rates apply.

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 11p 8p
1401cc to 2000cc 13p 10p
Over 2000cc 20p 14p
Engine size Diesel – amount per mile
1600cc or less 9p
1601cc to 2000cc 11p
Over 2000cc 14p

 

COMPANY car mileage rates have been slashed by up to 18% as HMRC cut the tax allowance across all six of the petrol and diesel categories in response to continuing fuel price falls.

Hardest hit by the rates, known as advisory fuel rates (AFR), are drivers of company cars with petrol engines greater than 1,401cc which have suffered a 3p cut in rates applicable from 1 March.

Business Car Manager

steve@bicknells.net

 

Are you losing out by having ‘Triangular Travel’? 1

businessman dream

Your normal commute to work isn’t business travel, but if you have to travel to visit a customer or visit somewhere on business then that is business travel.

Triangulation happens when you leave home on a valid business journey, but then return to your normal place of work, then travel home.

The travel between home and your normal place of work isn’t business travel.

You could avoid triangulation by not returning to your normal place of work, then the whole journey would be business travel.

If you are required to do training, that travel will count as business travel.

This can get even more complicate if you work from home.

On the 16th December 2013 Dr Samad Samadian v HMRC had his appeal on Travel heard by The honourable Mr Justice Sales and it was decided to uphold the previous decision of the First Tier Tribunal.

After an enquiry lasting more than seven years and three tribunal hearings, the First-tier Tribunal led by Judge Kevin Poole acknowledged Dr Samad Samadian had a dedicated office in his home which was necessary for his professional activity.

However, the panel did not accept that the home office could be treated as the starting point for calculating private practice business mileage involving habitual journeys.

So in summary:

  • Home to Hospitals – Disallowed
  • Hospital to Hospital – Disallowed as Business Expenses (but could be allowed against Employment)
  • Visits to Patients – Allowed

Are your mileage claims correct?

steve@bicknells.net

 

 

Doctor help my Travel Expense has been disallowed Reply

The raised traumatism on road

On the 16th December 2013 Dr Samad Samadian v HMRC had his appeal on Travel heard by The honourable Mr Justice Sales and it was decided to uphold the previous decision of the First Tier Tribunal.

After an enquiry lasting more than seven years and three tribunal hearings, the First-tier Tribunal led by Judge Kevin Poole acknowledged Dr Samad Samadian had a dedicated office in his home which was necessary for his professional activity.

However, the panel did not accept that the home office could be treated as the starting point for calculating private practice business mileage involving habitual journeys.

So in summary:

  • Home to Hospitals – Disallowed
  • Hospital to Hospital – Disallowed as Business Expenses (but could be allowed against Employment)
  • Visits to Patients – Allowed

Now would be a good time to check your tavel mileage claims to makesure they are valid.

steve@bicknells.net

 

 

HMRC get tough on Travel and Subsistence 4

Many employees claim travel and mileage expenses:

Travel expenses that qualify for relief

You can get tax relief on the necessary costs of business travel like:

  • business mileage allowances for cars, cycles, motorcycles
  • public transport fares
  • hotel accommodation
  • meals
  • tolls
  • congestion charges
  • parking fees
  • business phone calls, fax or photocopying costs

But you can’t get tax relief for things that aren’t directly related to the business journey – like your newspaper or private phone calls.

Even if your employer doesn’t pay you the expenses you can still claim tax relief

https://stevejbicknell.wordpress.com/2011/12/20/how-to-claim-tax-relief-for-employment-expenses/

https://stevejbicknell.wordpress.com/2011/12/19/tax-refund-for-business-mileage/

Temporary Workplaces and Working from Home

The HMRC rules are set out at http://www.hmrc.gov.uk/manuals/eimanual/eim32000.htm

There is a 24 month rule for a temporary workplace and examples of working from home, these situations are common to Construction Workers, Agency Staff, Consultants, Drivers and Owner Managed Businesses where their home is their office.

Most people have been quick to assume that all their mileage from leaving home is business mileage and they feel entitled to claim for drinks and meals whilst working away from home, many businesses even agreed dispensations for meals of £5 to £10 with HMRC so they didn’t need receipts.

Some organisations tried to use Salary Sacrifice to swap salary for expenses to reduce PAYE/NI.

HMRC v’s REED

Specialist recruiter Reed has spoken of its ‘extreme disappointment’ after losing a £158million battle with the taxman over footing the travel and subsistence bills of temporary job candidates.

Dished out by the staffing company’s agents to 500,000 temporary workers between 1998 and 2006, the daily payments covered lunch – up to £6, and commuting – up to £11.45.

They were meant to be part of a salary sacrifice arrangement – where temps forego some of their salary for such perks, but it has emerged that no real agreement was in place for the six 12-month periods to 2006.

This is because HM Revenue & Customs has successfully argued that the employed temps were engaged under a series of job-by-job contracts and not, as Reed says, under a contract that continued (as an employment contract) following the end of an assignment.

http://www.contractoruk.com/news/0010392hmrc_defeats_reed_158m_temps_tax_case.html

It’s not just REED

Take a look at this Blog on Accounting Web http://www.accountingweb.co.uk/anyanswers/self-employment-travel-and-subsistence-issue-compliance-office

This Blog is about a construction worker working 200 miles from home and claiming travel, accommodation and subsistence. HMRC are seeking to disallow these expenses.

Do you have any advice or comments to share?

Has your business been affected by this issue? What happened? What were circumstances? How did you ensure compliance with HMRC rules?

 

steve@bicknells.net