Current Mileage rate for Nannies using own car? (2012)

[thehiddenpaw]

Hi- thoughts (perferable with facts please)

i pay my nany 45p per mile and she has asked me to consider an increase. We negotiated the mileage a year ago. (Her salary has been increased since as part of our agreed annual review).

I personally get 40-45p per mile depending who pays my mileage so I set it at what I saw as a fair figure. in the nanny's initial contract, she had it at 22p which I thought was too low and hence suggested a figure which matched current business rates. I am open to being fair and I set her salary increase based on my own (and considering what I could afford). I would like to be similar in my approach to considering this request.

I welcome those of you who get or pay mileage for your experiences.

I think there's a limit set by HMRC otherwise it's seen as a taxable 'perk' - I think, I might be completely wrong!

Isn't there some tax legislation that says the maximum you can claim is 45p per mile - not sure of the details but DH is self employed and can only put this much through his business?

Thanks Panda - I'm not making it up !

Yes, it used to be 40p but went up to 45p last year. If you pay more than this it is a taxable benefit in kind. Employee would pay tax and NI and employer would pay NI.

I pay our nanny 45p which adds up to quite a lot each month but then again so does her fuel I expect!

oh and it's highly unlikely but if your nanny does more than 10,000 miles per year, the rate falls to 25p for any further mileage.

[geek]

we pay 40p per mile. The maximum permitted amount for HMRC purposes has just gone up to 45p per mile - anything above that and it becomes a taxable perk. You also need to consider what sort of car she's driving - it's not a petrol allowance, it's far more than that because it also covers wear / tear on the car which is why it's more expensive than just the petrol cost per mile. It's unlikely that a nanny's own car is a new top of the range mercedes which takes £400 tyres so unlikely the allowance needs to cover the maximum level of wear / tear.

thanks for the comments. I did tell my nanny recently (in passing) that if I paid a mileage rate above the HMRC value it would be seen as a benefit and would be taxable, I have checked the HRMC website and will print it off as there is some useful info there. I do think I have been fair. My nanny pointed out prices have gone up and I had already applied the maximum allowable milegae but maybe she did not understand this.