Some employers are supporting furloughed employees who volunteer for charities and to support organisations such as the NHS etc.
HMRC have clarified the tax position of reimbursements by the employer for fuel and mileage costs associated with volunteering.
HMRC confirm 6th May 2020 the following:
To support volunteer work by your employees, you may agree to refund fuel costs or fund the costs of volunteer mileage.
Employees using company cars
You may agree to refund the fuel costs (using the Advisory Fuel Rates) of your employees carrying out volunteer work related to coronavirus, for example, delivering medical supplies including PPE.
These refunds are a benefit and you may settle any tax and National Insurance contributions on your employee’s behalf by reporting through a PAYE Settlement Agreement.
You may also agree to fund the cost of fuel for volunteer mileage related to coronavirus. Volunteer mileage should not be taken into account for the purposes of the car fuel benefit charge for company cars.
Any tax and National Insurance contributions due should be reported through a PAYE Settlement Agreement as a coronavirus related benefit based on the appropriate advisory fuel rate for the volunteer mileage.
Employees using private cars
If your employee uses their own car to volunteer you can refund them up to the level of the approved mileage allowance rate. This is taxable and should be reported through a PAYE Settlement Agreement as a coronavirus related benefit.
If you pay your employee less than the approved mileage allowance rate they cannot claim mileage allowance relief.
One thought on “Volunteer fuel and mileage costs #COVID19 #coronavirus”
It just shows how pathetic the powers that be at HMRC are. We need volunteers and some employers may have to stop employees doing this valuable work. Employees may have already taken a 20% pay cuts.