car share BUT for employees of a different company

DAK... benefits to car sharing (aside from environmental ones) when sharing with people other than your own company.

I am self-employed (via my own ltd. co. ). I own my own vehicle and pay myself mileage (IR recomendded rates) for business mileage. I typically work at client sites most of the time on short term contracts.

My current client runs a car share scheme. AIUI employees within such schemes receive small tax breaks or similar for using their vehicle on a car share basis e.g. if they use their car to transport themselves and other employees to and from work they can receive a tax-exempt mileage allowance or somesuch.

However, if I were to give an employee a lift obviously my client couldn't do this for me being self-employed. But is there any other system that could "reward me"?

I'll hasten to add that I'm happy to car share in this way because of the ecological reasons (I'd also be happy to car share with someone else if convenient of course); I'm just interested if being self-employed I would receive the same "help" that employees would get (if indeed they do of course!).

And would the situation be the same if several people shared a car to a similar town/city/whatever but they all worked at differnt places?

cheers ian

Reply to
Ian Diddams
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In other words, you are not in fact self-employed at all. You are an employee of your own company, or possibly simply an unemployed shareholder reaping dividends.

You need to be careful that this doesn't count as commuting, in which case it would not qualify for business mileage. You also need to be careful that your arrangement means you don't fall within the IR35 regime, so that you would need to pay income tax and NI as if you were employed by the client.

News to me. But it would seem sensible for the government to encourage car sharing for environmental reasons, by allowing tax breaks for

*shared* commuting costs which would normally not qualify if unshared. I must say it sounds too caring to be true. After all, the ultimate sharing (using public transport) doesn't qualify either.

Are you sure you're not confusing it with the additional mileage allowance (over and above the basic 40p/25p) of (I don't know, but the figure that comes to mind is) 12p? If so, I understand the exact status of the passenger in terms of employment relationship does not matter. There simply needs to be a valid business reason for that passenger to participate in the business travel. But it must be genuine business travel, not commuting.

Reply to
Ronald Raygun

Are you thinking of the 5p per mile passenger payment? It is for fellow employees on business travel.

Reply to
Doug Ramage

Yes, I am. Can't think where I made the 12p figure up from.

I thought it was for any business passengers, but on checking the IR website, it does say the passengers also have to be employees. Mind you, it doesn't actually say they have to be employees of your employer. :-)

Also, this relief is only available if your employer actually pays said passenger allowance. This is unlike the basic AMAP rates, where relief to the tune of the difference between AMAP and what's actually paid (if less) is available.

For the OP, this could mean:

If his employer (i.e. his own company) pays him 50p per mile for business travel, being 40p basic plus two lots of 5p for taking two passengers which are the client's employees [assuming for the moment the unlikely scenario that it doesn't matter whose employees the business passengers are, just so long as they are employed for a common business purpose], then yes, those 50p per mile should be tax free. However, unless his client actually reimburses his company for the additional cost of carrying the passengers, then this exercise is pointless since his company will be out of pocket by more than the tax he saves.

If he falls under IR35, he would in some sense be deemed an employee of the client. Assuming it *does* matter whose employees the business passengers are, would this deemed employment put him on the same footing as other employees of the client, so that they would all be deemed co-employees, making him eligible for the 5p per mile per passenger allowance, if paid (not just to him, but to other employees if their cars are being used instead of his)?

Reply to
Ronald Raygun

Well, yes, of course. However, my description was to try and indicate that I am a totally seperate entity from my client and in no way an employee with anything that that may entail and/or grant etc.

cheers

ian

Having discussed the typical situation with the IR I am happy - as are they - that it is business mileage. ie not more than 24 consecutive months at that site (or its near environs).

I have taken as many precauions as I can to ensure I do not fall under IR35. The moving goalpost that IR35 is howveer of course means that many many contractors cannot be totally sure. Better legislation would have made it all far simpler of course; as would a simpler approach to taxation generally ... or more pertinently NICs, what they are, how they are collected, or even whether they are.

Dunno - hence my asking. Another client in recent times offered a car share scheme for its employees and there was definitely some financial benefit available that wasn't immediately all swallowed up by tax.

cheers

ian

Reply to
Ian Diddams

As RR has posted elsewhere, the 5p passenger payment has to be actually paid - unlike the IR's mileage rates. So, if a 3rd party is happy to pay it, and it is business mileage for all the individuals, then it should be tax-free, IMHO. If the amount is significant, I would suggest running it past your Tax Office, if you require peace of mind.

Reply to
Doug Ramage

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