IT Contracting and charging mileage?

L

Leela

Guest
Hi,

I've recently started working as an IT contractor- I work four days a week on-site with one client, but on some of those days I go out as a field engineer visiting their clients in turn, using my own vehicle. I'm a little bit confused about mileage rates; I've quoted the 2009 civil service rates for my 2L car at 0.59c per km. As I'm only contracting for the next few months before leaving the country, there's no way I'm going to hit the 6500km or so limit before the rate drops.

This crowd I'm currently contracting for seem to think the applicable rate is 0.29c per km and I believe they're going to try to foist this on me. As a contractor, do I have to go with whatever rate they decide or am I entitled to quote my own rate? I believe I'm entitled to to get something back from them for my petrol and wear and tear on my car, while doing their business. For further information, on Fridays I do my own project work, and look after a few other customers, each of whom I charge mileage/parking when I visit them at their premises.

I could really do with having the facts at my command before meeting with them this week to discuss! Apologies if this thread is in the wrong place!

T.
 
What they agree to pay you is entriely up to them - and what you can negotiate.

The Civil Service rates are the MAXIMUM that can be paid by an employer to an employee or director tax free.
 
And if operating as a sole trader if you receive mileage that constitutes part of income and your claims to expenses is on actual cost incurred. (fuel/tax/ins/finance/W&Tear etc. apportioned to that % used for business )
 
Domo said:
What they agree to pay you is entriely up to them - and what you can negotiate.

The Civil Service rates are the MAXIMUM that can be paid by an employer to an employee or director tax free.
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Just to clarify, I'm not their employee- they're my client. When I took on the gig, it wasn't foreseen that I'd be on the road for them, but now that's the case. If I had known, I would have discussed the mileage rate before commencing and its only come up now that I've submitted my expenses for September and October. If they had told me 29c and thats final, I would have laughed at them and said sure, I'll manage your helpdesk, but no way will I do driving.

As someone who is self-employed, my mileage rates are self-determined, within reason, of course, and this is how I operate with my other clients. Just these guys are big and I've never put muself out there as an "IT contractor" - I guess I need more information before I walk into a meeting and shoot myself in the foot.

Thanks.
 
If you log onto the AA they do a motoring cost breakdown based on car motor size.
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If you use this and the civil service mileage rates you can come up with a mileage amount to suit yourself. They don't have to accept; however you will at least have a reason for the amount you propose which you can provide them with. If they really want the service you provide they should accept.

If they're big as you suggest, are there other contractors? What are they getting? Can you check?
 
Hi, thanks for that info- very interesting. I'm happy enough charging 59c per Km, no point in going crazy!

Contracting is something this company are just getting into. I'm contracting as an engineer for them, while there are others who are taking contracts, but being placed on site with their actual clients. There is another guy in the office with me, but mileage hasn't been discussed with him either... the whole thing sounds a bit cowboy, I know! I'm getting paid on time, which is the important thing, but would like my expenses sorted!

29c is the rate that is being given to their permanent employees, which really sucks!

Thanks again.
 
Take note of Graham's post above - you have to include the 59c (or whatever you agree) as income & you can only claim actual costs against tax - so you need to keep note of all petrol fills, keep receipts and price actual mileage driven to and from the other site.
 
As a matter of interest, does your contract not include daily/hourly rates plus expenses incurred in undertaking work on behalf of the company. Say you had to travel and stay overnight - how does that work for you? Surely you have a clause in your contract which allows you to charge the client for any additional costs incurred by you? Any company which today is trying to only allow 29c per mile is really trying to take advantage of a weak contract - unfortunately, if you haven't specified in detail any additional charge which may occur, they are quite within their rights to offer whatever they want. Have you any idea what their employees can claim for similar costs (travel, meals, accommodation etc.)? By any reckoning, you should be entitled to the same.
 
Leela, I think ordinary car insurace does not cover you for this type of driving either. Just renewed mine recently and was reading the contract, if i was using my car to commute between different comapanies etc it was going to be dearer.
 
Although it's a short-term contract have you considered using a Limited Company structure? you could use an umbrella company if the length of the contract doesn't justify setting up your own company. If using an umbrella company while contracting they (the umbrella company) would be your employer and would agree the mileage rate with you. If this exceeds what the client is paying to the umbrella company it will reduce the amount of taxable salary paid to you. As an employee of the company any legitimate mileage allowance paid to you will be considered to be tax-free reimbursement of expenses. As already stated above, as a sole trader your mileage is taxable income and you can only deduct the actual costs incurred by you.
 
The whole insurance issue is worthy of consideration. The problem with driving the car to jobs if your insurance is for private use is that if you did have an accident and you tell the insurance company you were driving to a work job, they may be able to fight it out that you are not covered. It happend to a man who was employed by a company, he was doing some driving for them and they were paying him mileage, unfortunately he wrote off his car but had to trunk up himself because the company wouldnt accept any responsibility and the insurance company found out that he was transporting work goods in his car. Maybe you could say to your client that you are entitled to the 59c/km to cover the higher insurance costs you have to pay to cover work driving
 
I specifically checked with the insurance company 2 years ago about my mileage and the and they were happy that i stayed on "Social, Domestic and Pleasure" based on my mileage never exceeding 30,000 miles in the year and that i never Carry company goods.
 
Nigel Sage said:
I specifically checked with the insurance company 2 years ago about my mileage and the and they were happy that i stayed on "Social, Domestic and Pleasure" based on my mileage never exceeding 30,000 miles in the year and that i never Carry company goods.
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It is always a good idea to get any such contacts in writing, just in case.
 
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