Hi,

I have just been asked to deliver some manual handling training. Having never delivered training externally before, I an struggling with a few calculations. How the hell do you calculate travelling mileage rates to ensure you are not out of pocket in the end, as there is more than just the fuel cost to consider.

Thanks Phil

it has been 45p a mile since April 2011

I was lecturing for a university recently and their form, which they stated was based on the HMRC ruling was 45p per mile for the first 200 miles, then 25p per mile thereafter.

Chris

Here is the HMRC link that employees use: http://www.hmrc.gov.uk/rates/travel.htm

Direct Gov has a good overview of the subject:

http://www.direct.gov.uk...ncesandreliefs/DG_078375

The government scheme refers to the fixed profit car scheme whereby if you use your own car for work or receive car allowance you can make a tax adjustment between the money paid to you from your employer and the rate specified by HMRC. for example if you drive 15000 miles in your car, your company pays you 12p / mile, you can make a tax allowance claim of:-
assuming the figures from 2010 have not change i.e 40p form1st 10000 and 25 thereafter
10000 * (40-12) = 2800 GBP
plus
5000 * (25-12) = 650 GBP

total tax allowance 3450 GBP

if you claim charge your client 50p/ mile the difference between the HMRC figure is classed as profit and therefore taxable.

You may be asking about how much to charge a client - that is up to you. For that purpose HMRC rates, or anybody else's rates, are of no significance. But remember, it is part of a contract and if not agreed in advance your add-on for travel may be ignored.

Alternately, if you are minded to claim tax relief on travel for this extra little bit of work remember that you are opening a veritable can of worms. You will need to complete a self-assessment tax return, probably for evermore. You have a duty to complete that honestly and accurately, and may be faced with disclosure of more that is taxable than the few pennies you might recoup from travel costs.

Remember also that these extra income items, benefits in kind, allowances, property and investments, pensions etc must be declared anyway, and that not being asked to complete a tax return is no excuse.

The original post referred to 'external training' so presumably NOT an employee is doing the travelling.

So, as Ian above said, forget the rates for mileage.

You charge per hour for the training, so just charge the same or less for significant travel.

All my travelling is as a consultant. I'm reasonable (and I do need to be reasonable to keep business) so I don't charge travel time if the round trip is less than 30 miles. Anything above that will likely be over an hour of my time, so above that I charge my usual hourly rate for driving.

(as self-employed, there is an added 'benefit', the business % of my annual mileage is then used to calculate tax relief on motoring expenses like tax, MOT, servicing, insurance etc)

Phil,

No, you don't have to charge by the mile, but for tax self-assessment, in accounting one's expenses, you want to estimate the car use that is business use, have a little spreadsheet of fuel purchases, total mileages, log business trips/miles and at the end of the year add up the miles. For me business miles are about 5000.

Calculate over the year how many pence it costs per mile, that might be, say, 10p a mile. So business fuel cost was £500. You can put that as an expense on your self-assessment and get tax back.

If my total annual mileage was 25,000 then my business miles (above) are 25% of that. You can then put in as expenses, on self-assessment, 25% of your road tax, insurance, MOT, servicing, tyres etc.

You'll get 20% of those expenses back in tax deduction on your self-assessment......

....... a few hundred quid

Vat reg doesn't matter I believe. I hope so. I run a very simple business, I don't sell anything, I don't employ anyone, and my turnover is under 60k so I haven't VAT-registered. Maybe losing out a bit but, I think I am following all the advice I got at the businesslink sessions some years ago, and decided I didn't need an accountant, so saving on that.

Yes well as I was saying, my small local customers would not take too kindly to me charging/itemising 45p per mile for travel. So I don't.

Those further afield will have it explained in an initial quote that a round trip of say 40 miles will be charged as 1 hour of my time. That works out as more than 45p a mile so that's OK, and sort of pays for the shorter journeys as well.

I said above fuel consumption (diesel) might be 10p a mile, just looked at last year's speadsheet and it's more like 15p a mile now!!!

What you charge the client and what you can offset against tax are two distinct and separate prices. HMRC is covered above. I consider how long I spend to travel to/from the job and what I want to earn in that time - travelling prevented you earning your maximum rate (usually) and you usually don’t want to travel for free. Aiming for about 50% of normal rate for travel time, but be flexible. However, travel time & mileage could be a disproportionate cost to your overal invoice.
Understand the real world costs of your vehicle as a minimum (regardless of HMRC) - not just vel, ins, load/leaseb depreciation, but maintenance, consumables like tyres (at least 1 a year in the calculation), fuel at highest recent price with your real world mpg (assume that’s something monitored . You know if you’re closer to a 25k a tear or local work @10k. And use that to get the ballpark pence per mile then decide what you want as an income. Depending on the work invoice I might then do travel/mileage free or reduced rate. Just remember, if you do 5he 1st trip free, it’s hard to charge at a later date.
If google says its 2hrs 22mins but it takes 4 hrs due to roadworks, I’d stick to google. If it’s a good journey it could be 2hrs claimed.
I see Travel& mileage is a bit of a dark art.