Many workers denied full mileage

Companies are relying more on employees providing their own vehicles for work but few staff are getting the full mileage rate, according to the AA.

More than six million workers are claiming mileage expenses for using their own car on company business - twice the number calculated by the Government in 2001.

But only around three in every 10 claimants gets the full Government-approved 45p-a-mile allowance for the first 10,000 miles of company use, found an AA/Populus survey of AA members who use their car for business.

Of the 5,094 people polled, 30.3% were paid the 45p-a-mile untaxed maximum. Overall, including those being paid 45p a mile, 35% of the drivers now claim between 41p and 45p a mile and have therefore benefited from the Chancellor's 5p increase to the allowance announced in March 2011.

The AA pointed out that while the tax threshold on UK private car mileage allowances is up 12.5% on 10 years ago, the USA Inland Revenue Service has raised its threshold by 52%.

AA president Edmund King said: "Twice the number of drivers claiming for work-related mileage compared to 10 years ago shows the extent to which firms have increasingly relied on their employees to provide transport for work.

"Between 2008, when petrol prices first approached 120p a litre, and March 2011, when petrol cost 133p before reaching 137.5p that summer, workers using their own cars were getting angry. Not only were they insulating firms from the impact of soaring pump prices but effectively taking a wage cut.

"The Chancellor's 5p boost in 2011 went largely unnoticed, which the AA now reveals potentially affects six million working drivers. However, the unrestrained pump price surges over the past two years augur more pressure to raise the threshold in the not-so-distant future."