Ray Chidell

RAY CHIDELL investigates the tax charge due when an employer pays for office to home travel after working late.

RAY CHIDELL looks at some of the practical issues surrounding the new rules for reimbursing business mileage travelled in privately owned cars.

EMPLOYERS MAY FROM 6 April 2002 reimburse up to 40 pence a business mile driven in a privately-owned car, without causing the director or employee concerned to incur a tax or National Insurance charge. This rate applies for the first 10,000 business miles in any given tax year. Any additional business mileage may be reimbursed at a lower rate of 25 pence a mile.

Land remediation relief

The scope of the Finance Act 2001 relief for land remediation has been examined in articles in Taxation in the 11 October 2001 and 21 February 2002 issues. These have highlighted the confusion over whether the relief is confined to capital expenditure. The following letter from the Revenue clarifies this point.

'Dobby has heard of your greatness, sir, but of your goodness, Dobby never knew.' So speaks the hapless house-elf to Harry Potter in the second of the popular series of children's books.

Drivers of smaller cars may be forgiven for addressing the Chancellor in similar terms, particularly if they own their cars privately but drive them for business purposes. The proposed changes to the authorised mileage rates produce some odd results in practice, and perhaps serve as a warning that tax is a blunt instrument to use for social engineering.

Payments in Lieu of Notice
Payments in lieu of notice raise complicated issues for the employer, as RAY CHIDELL explains.
The whole question of notice periods can prove quite a headache for employers, not least when drafting terms and conditions of employment. The subject provides complications from the point of view of both tax law and employment law. Furthermore, an employment contract that is well drafted from the tax point of view may well create employment law difficulties. Nowhere is this more apparent than in the area of payments in lieu of notice.

Van Or Car?
Ray Chidell considers the advantages of a company vehicle being classed as a van as opposed to a car.
The tax treatment of a van provided for the private use of a director or employee is considerably more favourable than that of a company car. This has led to serious consideration being given in some quarters to the use of a van in lieu of a car. While it may not be a realistic consideration for the family driver, the range of vans available may mean that it is worth thinking about for the driver who is normally alone in the vehicle.