A small business company director wants to know the correct business mileage rate for paying staff in their own cars
RECENTLY my employees have been moaning about the pence per mile rate I pay them for business mileage. At 25p a mile is this too little and should I be paying them more?
Ralph Morton, editor of Business Car Manager, provides the answer on business mileage.
THERE is no right or wrong on this. It very much depends on your relationship with your staff and how much you feel able to reimburse them for the business mileage they perform in their own personal cars.
The name for the payment rate, which is tax-free, is called the Approved Mileage Allowance Payment. It is there to cover the cost of fuel, the cost of business insurance, depreciation and wear and tear while your employee is using their car on business.
Up until 05 April 2011, the Approved Mileage Allowance Payment was 40p per mile.