Mileage claims - multiple LTD companies

[smnpukbmf]

I have two Ltd companies - I claim mileage from both. Is the 45p up to 10,000 miles per business? Or is that my individual allowance? Ie do I switch to 25p a mile when *I* reach 10,000 miles in total or when each business hits that limit?
Thanks!

 

[David Griffiths]

You only get one 10,000 mile band because the employments are associated. (They are companies under common control and are therefore associated companies for a number of tax purposes, including corporation tax)

HMRC link

 

[Newchodge]

You only get one 10,000 mile band because the employments are associated. (They are companies under common control and are therefore associated companies for a number of tax purposes, including corporation tax)

HMRC link

How would that work if an ordinary person worked for both companies? Is it the employer's obligation to check?

 

[David Griffiths]

How would that work if an ordinary person worked for both companies? Is it the employer's obligation to check?

It would have to be. The employer has an obligation to report any taxable beneifts for its employee, including expenses payments paid in excess of any tax free threshold, or to tax them at the time that the payments are made.

There is nothing to stop both employers paying 10k miles at the full rate, but the overall excess over the limit is taxable. They would have a similar issue with calculation of National Insurance. It would probably make more sense (and much easier calculations) for the employee to be employed by only one company with a cross charge to the other for their share. Of course, it could well be that VAT comes in to the issue there and might cause problems.

 

[numbersrule]

The link below confirms that it is 10,000 total for associated employments, but if the businesses are not associated then the employee can have 10,000 for each employment.

EIM31280 - Employees using own vehicles for work: more than one employment: associated employments - HMRC internal manual - GOV.UK

www.gov.uk

 

[Bobbo]

They would have a similar issue with calculation of National Insurance.

No 10,000 mile limit for NI purposes

 

[David Griffiths]

No 10,000 mile limit for NI purposes

I was referring to the calculation of NI on the employees salaries with connected employments. Neither the employee or the employers get two set of exempt NI bands, and the question of NI on expenses doesn't come in to that.

But if an emplyer pays expenses in monetary terms which are not tax exempt then the excess would be subject to NI in the same way as any monetary remuneration. Otherwise employers could pay someone a basic salary at the NI threshold and a huge chunk of taxable expenses.