# Increase in mileage rates due to increased costs



## indebtedgal (15 Mar 2012)

What are people's views on this, current rate of mileage is .50 cent per mile, this was set 5 years ago. Petrol is 1.67 a litre now, is there an argument for increased rates.


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## Romulan (15 Mar 2012)

It has come up in conversation with colleagues who, like me, use their cars extensively for work.

We reckon that we are no longer covering the costs of using our cars.  I've been meaning to sit down and work this out more precisely.

A big problem is where you go over the 6,500km limit and for some bizarre reason, the rate drops.  At which point you are paying your employer to use your own car for their business.

We'd rather they just gave us vans and be done with it.

We don't see any hope of a rate increase.


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## mandelbrot (15 Mar 2012)

Well if someone wants to put up their figures it can be worked out - a conversation started on this topic a while back, but I don't think the OP liked the answer when it was laid out for him... http://www.askaboutmoney.com/showthread.php?t=163935


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## vandriver (15 Mar 2012)

In doing the figures myself,I was surprised to find that fuel (12k miles/year) was only 28 % of total cost per year.
The total cost for me was 35c per km.


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## Setanta12 (15 Mar 2012)

I don't have a link but any rates should be checked against the Civil Service rates.   Any increase on these rates means BIK .. .. ..


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## Crugers (16 Mar 2012)

Kildavin said:


> ...  Any increase on these rates means BIK .. .. ..


Not necessarily. Subject to prior agreement with the Inspector of Taxes a justifiable increased rate could be paid without it being taxable.


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## mandelbrot (16 Mar 2012)

Crugers said:


> Not necessarily. Subject to prior agreement with the Inspector of Taxes a justifiable increased rate could be paid without it being taxable.


 
In theory yes, but have you ever actually seen this happen?


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## mandelbrot (16 Mar 2012)

mandelbrot said:


> Well if someone wants to put up their figures it can be worked out - a conversation started on this topic a while back, but I don't think the OP liked the answer when it was laid out for him... http://www.askaboutmoney.com/showthread.php?t=163935


 
Just spotted my original link was broken; this is the thread I was referring back to: http://www.askaboutmoney.com/showthread.php?t=163935


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## mandelbrot (16 Mar 2012)

indebtedgal said:


> What are people's views on this, current rate of mileage is .50 cent per mile, this was set 5 years ago. Petrol is 1.67 a litre now, is there an argument for increased rates.


 
I'm not sure where you've gotten this rate from, is this just the rate that your employer pays across the board for mileage? The civil service rate
is 95c per mile for the first 5,000 miles, and then falls to 45c per mile beyond that.

But your employer is under no obligation to pay you at the civil service rates, they may simply pay you anything up to those rates without requiring Revenue approval.

If you drive a car that does 30mpg, that equates to €0.25 per mile in fuel cost (at €1.67 per litre). So that leaves you another €0.25 per mile to cover wear & tear on the car, tyres, servicing etc. 

Say you do 10,000 business miles in the year:
You'd have €5,000 of mileage expenses paid to you.
Fuel cost as above would be €2,500.
If your service interval is 10,000 miles, and a set of tyres lasts you 10,000 (you'd have to be burning some rubber!) miles - you'd have the other €2,500 of mileage received to cover this plus the additional wear & tear.

Seems fairly reasonable to me?


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## Purple (16 Mar 2012)

If you drive an average priced fuel efficient car then the Revenue approved rates are more than sufficient. I drive a 2.9L car so the rates don't cover my costs but why should the state subsidise my costs through increases in allowances?


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## Crugers (16 Mar 2012)

Purple said:


> If you drive an average priced fuel efficient car then the Revenue approved rates are more than sufficient. I drive a 2.9L car so the rates don't cover my costs but why should the state subsidise my costs through increases in allowances?


Shouldn't that read
"If you drive an average priced fuel efficient car then the Revenue  approved rates are more than sufficient. I drive a 2.9L car so the rates  don't cover my costs but why should the state subsidise my costs *MORE* through increases in allowances?"


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## mandelbrot (16 Mar 2012)

Crugers said:


> Shouldn't that read
> "If you drive an average priced fuel efficient car then the Revenue approved rates are more than sufficient. I drive a 2.9L car so the rates don't cover my costs but why should the state subsidise my costs *MORE* through increases in allowances?"


 
I'm not sure I follow your logic there.

Are you suggesting that allowing tax free reimbursement of legitimately incurred expenses is somehow a state subsidy?

Business owner 1 buys a delivery van, and it is only used for business purposes, delivering the employer's goods / services, then it's running cost (and wear & tear on the capital cost) are allowable deductions against the income of the business. Is that a state subsidy? if so then arguably the deductibility of any overheads incurred in the business are a state subsidy.

Business owner 2, whose business is identical to business 1, decides not to buy a van but insists that his staff have to perform this function in their own vehicles and bear the cost of it themselves. All other things being equal the business becomes more profitable (operating with a lower overhead). The employees of business 2 are substantially worse off than the employees of business 1 - should they not be allowed to claim for a legitimate expense incurred in the course of their employment?

All that the system of tax free reimbursement does is to streamline things, so that tens (or hundreds) of thousands of people don't have to submit vouched claims for travel expenses to Revenue every year.


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## Latrade (16 Mar 2012)

I see no need to change the rate, fuel has always only been a part of the "cost" of mileage expenses. The rate doesn't take account of the increases in fuel efficiency and reliability of more modern vehicles. 

In addition, it wasn't too many years ago when fuel rates fluctated up and down by quite a bit. I don't remember these conversations calling for it to change when the rates were at a low point.


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## Crugers (17 Mar 2012)

mandelbrot said:


> I'm not sure I follow your logic there.



Not exactly my logic - it was Purple's statement quoted but with one additional word.
I only added the word *more*...

So - No - I'm not "_...suggesting that allowing tax free reimbursement of legitimately incurred expenses is somehow a state subsidy_" but it appears Purple is!


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## indebtedgal (17 Mar 2012)

Does anyone have a template for how to work out costs. I don't do a lot of mileage at all, but when I highlighted recently to a manager that my mileage in the next month or so would be high she wasnt too impressed, And I know it will come up again so i
Would like to be able to point out I'm not on the "make" by doing mileage, or have the sense to say nothing if it's working out for me. Eg, what is a mile costing me, between maintenance tax & fuel.


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## vandriver (18 Mar 2012)

Main costs:
Insurance
Tax
Depreciation
Interest
Tyres
Servicing
Tolls
+ say 300 per year extra for rare big jobs

Just fill in your per year costs for all of the above and divide by your average yearly mileage.


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