Do I Need To Pay For My Employees' Mileage?
Do I Have to Pay For My Employee’s Mileage?
As an employer it is standard practice to pay your employee a wage to reward them for the work that they carry out for you, in their day to day role. But a wage is not always the only financial contribution that you could make towards your employees.
In some instances, you may pay specific expenses that your employee could have incurred when carrying out their job and because of this there are rules about when you may pay a specific expense to your employees and how it should be paid. Therefore, it is important to be aware of the rules that relate to paying your employees expenses. One expense that is important to understand is whether you need to legally pay for fuel for employees when they use a vehicle to carry out their job.
Rules Relating to Expenses
When paying for expenses for your employees you must implement specific procedures. These rules and procedures should be in your employee handbook under the expenses policy. It is important to include:
- Requirements to obtain receipts for the purchases that employees are seeking reimbursements for; and
- Information on whether or not the expenses are taxable, this is due to taxable expenses over a specific amount needing to be reported to HMRC
It is important for your employees to follow your rules and procedures carefully. If they do not follow your rules and procedures carefully, then you may have to take them through your disciplinary process.
Do I Have to Pay For My Employees’ Fuel In a Private Car?
If your employee is a taxpayer, then they have the right to tax relief for journey’s they carry out as part of their work. Your business will be able to either reimburse your employee’s fuel expenses or your employee is able to claim a deduction back from their income.
Tax relief for journeys carried out for work generally does not apply for ordinary commuting from the employees’ home to their ordinary place of work.
You must include in your expenses policy information on how expenses for travel should be recorded including:
- Dates of travel
- Destination of travel
- Miles Travelled
- Receipts received; and
- Records of payments they have made
If you need help understanding where you stand on paying your employee’s fuel expenses then our experienced team of employment lawyers are on hand to assist you. For a free initial consultation please contact us today.
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