Nannies and mileage charges

[nbee84]

Following on from the thread where the employer won't pay 40p per mile to her nanny....

Government max mileage has just gone up to 45p per mile. Is that the level everyone should get? Should it not be in some way based on the car that nanny drives? I mean if I drive my dh's 2.4l Saab the it is going to use a lot more petrol than my 1.2l Clio.

Just asking because I charged 30p and have just put up to 35p. Working out my actual petrol costs from using a full tank and seeing how many miles I do - depending on whether I'm driving round town or up and down motorways - it's 18 - 21p per mile, so still leaves 14 - 17p to put against wear&tear.

Just wondered what other people thought?

How do you work out the other costs? If you only needed a car for the job, then the cost of the car divided by the number of work miles over a certain time period could work out to be a high amount per mile.

I only get 20p per mile I do as a nanny, and my car drinks so much fuel!

The new 45p per mile is the government's fixed profit scheme. If you pay at this rate there is no tax implications either way and it is not classed as a benefit and is not taxed. It is not just passed on fuel usage, but to cover wear and tear, tyres, servicing, tax and insurance. It is a standard rate to encourages those who are paid it to have smaller more economical cars and therefore have a bit more profit.
If you receive less than this it would be to your advantage to fill in a tax return for your motoring expenses and claim tax relief on the difference between what you get paid and the 45p level.
Personally as an employer I pay this rate as it saves on administration on my part.

Though if claiming Tax Relief, is that the difference between what you get and the AMAP or is it the tax on the difference?

The alternative is that the employer provides a car - the cost of which could be huge in comparison to paying the mileage allowance. Also providing a car may mean knowing about when it is and isn't considered to be a company car.
Easier for employers to pay the AMAP I would have thought.

Useful information about claiming Tax Relief on mileage. It is 20% of the difference between that the employer pays and the approved rate.

20% nick?

so if employer pays 25p and rate is 45p, thats 20p difference but 4p (20% of 20p)

are you saying the nanny can only claim 4p extra for every mile she does?

or have i read what you meant wrong?

Yes, it's Tax Relief - so the tax on the amount. Take a look at the link for an example.

i did read the link, i think it is very unfair that you cant claim back the whole difference

just as well i get a works car, or i would be a very annoyed blonde!!

To be clear, you can claim the whole of the difference as an expense incurred in relation to your employment, but the effect on the amount of tax you actually pay is only 20% of that amount (for a basic rate tax payer).