Pesonal Mileage - Company Van

MILLY21MILLY21 Feels At HomeRegistered Posts: 59
Quick one for you all please. Company vans for site works have been used by employees to do a few personal miles. MD now wants staff invoiced per mile for personal use to discourage this useage - obviously usage opens a large can of worms with regards to "pool" vehicles/personal benefits - so basically he wants 18p per mile and this value to be deducted from their wages- anyone had any experience of this?

Thanks

Comments

  • slackdaslackda Trusted Regular Registered Posts: 460
    From my experience it depends on the mileage done, i.e one trip to the tip per month HMRC says its ok, or poping to the shops, but anything more its gets classed a BIK...

    http://www.hmrc.gov.uk/paye/exb/a-z/v/vans.htm#3 is good


    i know there is something on the website about it when i find it ill post it


    found the bit i was looking for:

    Vans used for ordinary commuting and insignificant other private use (and any fuel provided)
    Definitions or restrictions
    In most cases, ‘ordinary commuting’ is the journey an employee normally makes between their home and permanent workplace. (The position is different for employees required to work from home – see the ‘Technical guidance’ section.)

    ‘Insignificant’ other private use means that the employee’s private use of the van in addition to ordinary commuting is very much an exception to normal usage and only lasts for short periods on an occasional and irregular basis. For example:

    •making a slight detour to buy a newspaper on the way to work counts as insignificant private use
    •an employee using a van to do their weekly shopping counts as more than insignificant private use – see the next section for the rules that apply in this case
  • MILLY21MILLY21 Feels At Home Registered Posts: 59
    Thank you very much for all this information, much appreciated.

    We have always found the issue of our company vans difficult and have had many a letter go to and from the revenue, we finally satisfied them a few years back that the vehicles were not a benefit to our staff so to start chargeing staff for personal miles seems to be opening a whole can of worms. But I can't ignore it now.

    Staff using the vans do not do it regularly, maybe one saturday in a month for maybe 50/60 miles so it's not nipping out for a paper but its not using the vehicle to go on holiday.

    Any comments please?

    Thanks
  • slackdaslackda Trusted Regular Registered Posts: 460
    MILLY21 wrote: »
    Staff using the vans do not do it regularly, maybe one saturday in a month for maybe 50/60 miles so it's not nipping out for a paper but its not using the vehicle to go on holiday.

    Any comments please?

    Thanks


    If i remeber correctly this would not incurre a BIK provided that its no their van, i.e member of the office staff borrows the van for the weekend, they would have to pay for all the fuel though.....
  • MILLY21MILLY21 Feels At Home Registered Posts: 59
    Its a bit tricky though isnt it. We have decided to do a notice to inform staff of possible tax implications to them personally of using the vehciles, requesting they dont use them and that if anyone has to use them they will be charged (that should cover the fuel then).

    Thanks you for your help again.

    Best regards
  • payrollpropayrollpro Trusted Regular Registered, Working Together with HMRC Posts: 404
    Hi Milly,

    I think we need to split this issue into two important factors. Firstly, what is your employer trying to achieve? Secondly, is there a BIK issue to deal with?

    From your original post I got the impression the employer wanted to discourage personal use of the vans and perhaps make sure the running costs were not being distorted by some personal mileage. If this is the case I don't think it is sensible to confuse the issue with simultaneous discussions about taxation.

    From a pure cost and insurance point of view I think the company needs to take a corporate view about personal use and if it perceives there to be a problem then it needs to stamp it out and either forbidding it in terms and conditions (which is needed anyway) and/or imposing a mielage charge is the only way to do it. What you need to avoid is having both, forbid it and then accept it by charging. If its forbidden then its a disciplinary matter and imposing a charge merely makes the terms and conditions a laughing matter.

    If there is to be personal use allowed (and lets face it sometimes you have to accept reality, for example personal internet use of company computers) then i would have suggested a much higher charge to cover the full running costs, say 25p or 30p a mile. Whilst some will see this as still cost effective, others will stop using the vans.

    The taxation issue, to me, is a secondary issue. The requirement is to disclose the vans as personal use and to declare the full tax value of them, both the vehicle and fuel, unless the company has evidence to show that the actual use complies with the concession, as pointed out by slackda (where do you guys get these names!). The evidence is a mileage log which shows that the total mileage travelled by the van can be explained by the direct work related activities plus the commuting journeys with only a minor amount of unexplained additional mileage.

    It's a pain but without such clear and unambiguous evidence a compliance review will merely reject the view that no BIK has occured and an assessment will be raised.

    Payrollpro
  • MILLY21MILLY21 Feels At Home Registered Posts: 59
    Hi Payrollpro

    Thank you for your for your post. All advice noted and greatfully received.

    Regards

    M
  • blobbyhblobbyh Font Of All Knowledge Registered Posts: 2,414
    Going slightly off topic but where are the vehicles kept out of working hours?

    When I was at the window company a couple of years ago, the two directors didn't want drivers/employees using the work vans for personal use to which the drivers said "Fine, we'll leave them at work each night then". So it was either take the vehicles home and turn a blind eye as long as the personal mileage wasn't excessive or have the vans left on unsecured premises on an industrial estate, frequently roamed by youths late at night and over weekends. So what was it to be? Suffer the extra mileage or suffer increased insurance premiums and the potential loss of business caused by the vehicles being vandalised and out of service? Not to mention several severely disgruntled employees.

    The drivers won their argument. So if you do expect them to still take some responsibility for their vehicles out of working hours then what's wrong with a little slack? To me, it's little different than Googling or Facebooking at home using your work laptop and I honestly think your boss needs to relax a little. Don't always look at everything from an accountants perspective but sometimes from a human one.
  • MILLY21MILLY21 Feels At Home Registered Posts: 59
    Well this is where the blind eye comes into it, because they work on sites up and down the country they have to take the vans home and to protect the staff our MD has always fought their corner and said they are more like pool vehicles because sometimes they are kept at the company premises (like during the Christmas shutodwn) and sometimes different staff members take them home for early starts, he has always argued that if you were to charge employee a for use of the vehicle then employee b who gets dropped off at home should have a portion of that charge. I'm not explaining myself very well.

    The problem is now some staff members dont abuse the vehicles, the nip for a paper for example but other members of staff use this as their own personal vehicle and to try and stop this the MD wanted to have a charge against these miles. Many people would argue that the cost of "x" pence per mile would suit them much better than putting fuel, tyres blah blah on their own vehicles.

    We have now written to the staff to request they do not use the company vehicle out of hour's unless absolutely necessary and if they do they will be charged a fee, they seem to have stopped them - for now.

    In the past our insurance used to cover business mileage only so strictly speaking in the past if the staff used it out of hours they wouldn't have been covered.

    I suppose it seems tricky, because like you say you kinda want to be a little flexible but at the end of the day you are answerable to the old HMRC.

    M
  • blobbyhblobbyh Font Of All Knowledge Registered Posts: 2,414
    Similar to Slackda's post, this page is a bit out of date but some of the layman's English points on here might put employees off excessive usage of your vans if they're gonna have to suffer tax on them:

    http://www.mybusiness.co.uk/Ye6JpSBoR0cJdg.html
  • MILLY21MILLY21 Feels At Home Registered Posts: 59
    thanks will take a look at it, will be useful for the new year when we come back

    m
  • Pearce161Pearce161 Feels At Home Registered Posts: 57
    sorry to resurrect an old thread but I was talking with a friend about this today.
    Some background:
    He has been on tax code K to reclaim some unpaid tax, as it turns out he should have come off this is January but there has been a mix up and he is still on it.
    When he spoke to HMRC the first time the lady informed him it was to reclaim unpaid tax on a BIK from his company van for 2010/11 and 2011/12. She told him 10/11 he had owed £2,800 and for 11/12 £7,000 (!). When he told me I said that it couldnt be right and to speak to them again. Now the second time they have said he owed £2,350 for the two years combined...quite a difference.

    The issue comes in though, as from 2010-2013 they were not allowed to use the company vans for personal use, a rule he stuck to as the company had told him they were covered on insurance for private/out of hours driving. He did go home and to site in the van. From 2013 they have allowed personal use but with a 20p per mile fuel charge.

    I was under the impression that the 2010-2012 there would be no BIK as vans/commercials allow for travel home and to site. The chap at HMRC has told him that because he goes home in the van he is charged for personal use but I thought this only applied to company cars.

    This is why they are saying he owed them £2,000+ as he has two years BIK for private use of the van + two years fuel benefit charge.

    Can anyone offer an insight into this as it sounds all a miss to me if he was only going home and to site surely there should be no BIK and they have reclaimed £2,000+ from him that they shouldn' have.
  • helen567helen567 Registered, Users Awaiting Email Confirmation Posts: 1
    Hello all,

    I'm struggling to find legal advice or help with regards to tracking.

    Our company vans have recently been fitted with trackers, which are being monitored at all times. So I and out of work hours, for the purpose of deducting an amount per mile outside of work time. They have just deducted me a large s mount of money, deducting journeys that I have done out of work time, but for work! When confronting them on this I have been told to just get on with it, and if I make a fuss I won't have a job.

    Advice please
  • MickdundeeMickdundee LondonRegistered Posts: 122
    Advice?
    Speak to an employment solicitor. This is a forum for incompetent accountants.