MPs mileage claims

Request

My questions concerns the mechanism by which MPs seek reimbursement for the cost of using their private cars while on parliamentary business.

I replicate below a prior comment made by IPSA on the matter of mileage expenses. My questions are as follows:-

Chapter Nine of the Scheme relates to Travel expenditure. There is not a ‘mileage allowance’. MPs may use their private vehicles for travel and claim the cost of the mileage when undertaking parliamentary work and where there is a specific need or it is cost-effective to do so.

  1. Is there a defined method by which MPs should calculate the cost of using their private vehicle?

  2. HMRC defines the mileage rates that can be claimed by employees or self employed individuals using their own cars. Any payments made in excess of these rates is effectively treated as disguised remuneration and needs to be declared on a self assessment tax return and is taxable. Do these rules also apply to  MPs?

  3. Why are the HMRC rates not used?

  4. What mechanism is in place to audit the accuracy of the MPs calculations as to the cost of using their own cars?


Response

IPSA holds the information that you request.

I will take each of your questions in turn.

1. Is there a defined method by which MPs should calculate the cost of using their private vehicle?

The rules governing mileage claims can be found in 9.17 of The Scheme of MPs’ Business Costs and Expenses.

Private cars, motorcycles or bicycles may be used as an alternative to public transport. An MP undertaking a journey by private transport will be reimbursed in accordance with the rates administered by HMRC.

TypeDescriptionRate
Motor mileage rateTo cover business travel by private motor car45p per mile for the first 10,000 miles / 25p per mile thereafter
Motor Cycle mileage rateTo cover business travel by private motor cycle24p per mile
Bicycle mileage rateTo cover business travel by private cycle20p per mile

2. HMRC defines the mileage rates that can be claimed by employees or self-employed individuals using their own cars. Any payments made in excess of these rates is effectively treated as disguised remuneration and needs to be declared on a self assessment tax return and is taxable. Do these rules also apply to MPs?

IPSA reimburses at the mileage rates that HMRC defines. Therefore no costs above the HMRC rates can be claimed in order to make this a taxable benefit.

3. Why are the HMRC rates not used?

 I confirm that HMRC rates are used.

 4. What mechanism is in place to audit the accuracy of the MPs calculations as to the cost of using their own cars?

 IPSA has three levels of assurance over claims. Information about that process can be found on our website.

Ref:
CAS-134061
Disclosure:
March 26, 2019
Categories:
IPSA - POLICYMPs' TRAVEL
Exemptions Applied:
None