Approved mileage rate -- why does it drop from 40p to 25p?

[eleusis]

Why does the approved mileage rate drop from 40p to 25p at 10000 miles?

I'm just thinking that with 25p and current petrol prices, are we in a position where emplyees will actually be paying more to do company business then they can get reimbursed? Seems high time this figure was revisited.

As far as I know the figure drops because the 40p is also supposed to cover any additional insurance costs etc. as well as the actual cost of the petrol, so theoretically this would be covered within the £1500 extra paid for the first 10000 miles. I do agree that the basic rate should be upped now (although probably not the ceiling of 10000 miles). I'm fairly sure it has remained the same for the last five years (and probably longer)

I though it was meant to cover petrol plus wear and tear on the car, which certainly continues beyond 10,000 miles.

i have changed jobs within the company i work for - a secondment even - not even a change! and i have lost the ECUA "ware& Tare" money i got on my wages. in favour of the 40p/10,000miles as mentioned above. thats 40p regardless of engine size - the environmental argument is being spouted for this - suits me as i hjave a 1.0ltr engine and therefore make 10p per mile on the previous arangements which used to be a 4k limit then all down to 25p - last year.

But WHY does it go down. Does your car suddenly stop wearing and tering at 10,000 miles?

It is assumed that the one-off costs like insurance and car tax are covered by the extra 15p for 10000 miles. So effectively you have £1500 a year to pay for a proportion of your insurance, car tax, servicing costs,and some depreciation, then it reverts to petrol and a small amount of wear and tear only.

Working it our over the second 10000 miles.

At 30mpg, you are getting £7.50 for each gallon of petrol, which is around £1.65 per litre. That means you are getting around 65p a litre 'profit'. So at 6.6 mpl for the next 10000 miles you get £964 towards depreciation/wear on tear. Which, granted is not much!

However, I do believe the rates are under review.

i dunno - but when the limit was 4k last year - i had done that with still 5 months to go - so the travelling was longer by train - on company time - my cost per hour - more expensive - paid for with company card -the whole thing was prohibitive.

i certainly wasnt as productive and i did not volunteer for meetings that would take me v. far - i certainly would drive up to and around london for that time.

and so ONE meeting in london could take most of the day - catch train at 9am ( and not before as this is when i start work - stamp feet!!) get to destination around 11am-12om depending on who has jumped of a bridge that day, signal failure, cancelled train, leaves, snails on track, driver with pmt...whatever. have meetin 12-2 - lets factor in a LUNCH somewhere - as i am obliged to take half an hour and make it 2.30 - then i travel home - be home for around 16.30 - if none of the above train debacles take place and work for 1hour from home.

the thing about this is that i suddenly become a left wing loony wishing to join 7 unions and warm my hands on the steel drum fire at the picket i set up that morning....i seriously resent being taken advantage of like this - and the company suffers until april

no longer will i get on a train at 6.30 to make sure i deffo get to a meeting for 9am in london - so the whole thing is completely prohibative

Well, I've just worked out our luxury 2002 Astra Club goes for about 175 miles on one full tank of petrol. Tank of petrol currently costs about £46. And that works out to 26p per mile. So it will actually cost us 1p per mile plus wear and tear on the car. We have to use our personal car at a loss for a staff position company business.

Oh how I love Gordon Brown.

When did it go from 4000 miles to 10000 that it drops from 40p to 25p?

the mileage has gone up now so 40p/pm and 10000 - i didn't relaise that there was legislation or anythng - i thought that the company i worked for has taken our vews into account and acted accordingly -

so there is legislation is there?

I think it's all based on what HM customs will allow www.hmrc.gov.uk/rates/travel.htm before they tax you for it (benefit in kind???)

I'mnot sure if I've got this right, but this link says since 2002/2003, so why were they caping you at 4000 miles. Interesteing, as my DH said the same thing earlier. And I sent him the same link.

Now, can companies cap this at 4000 miles rather than 10000 if they feel like it?

As a bit of a side issue, the Revenue limits do not stop you from paying mileage at a higher rate than the 40p/25p, it is just that after that point it becomes a taxable benefit.

Therefore, in theory, a kind employer could keep paying at the higher rate and gross up for the income tax you would pay on it.

They don't though. Of course.

maybe they can't cap it? dunno - oh i wish i knew then i would back claim years of 5p per mile i have been diddled