Factsheet number: 7.7



Last Updated: 2 October 2020

Introduction

You may require your PA to drive as part of their work, either in their own car or in your car. This might be to take you to appointments, to go shopping or to pick things up for you. This fact sheet is intended to give you some advice about what you need to consider if driving is included in your PA’s job description.

Contents

1. Checking PA driving licence endorsements

2. Insurance

2.1 What type of insurance should my PA have?

2.2 What type of insurance should I have?

2.3 Checking relevant documents

3. Mileage and other expenses

3.1 Mileage

3.2 Additional costs

3.3 Record keeping

1. Checking PA driving licence endorsements

If your PA will be driving you in their car, we advise customers to check your PA’s driving licence for endorsements. To do this the PA has to go to https://www.gov.uk/penalty-points-endorsements/overview and follow the instructions. This will then bring up a code that they can give to you so that they can look it up. Alternatively, they can print or save a copy of the driving summary to show you.

2. Insurance

2.1 What type of insurance should my PA have?

If your PA uses their own car in the course of their work for you, they must have business use cover included in their car insurance.  The PA must check with their insurance company to ensure they have adequate cover which also includes any passengers. Their insurer may do this either for free or for a small additional charge.

If your budget allows, you should reimburse the PA for any costs incurred when upgrading to business cover i.e., the difference in price between their standard car insurance which they should pay for themselves and the cost of insurance with business cover included.

It is vital that your PA contacts their insurers if cover for business use is not automatically provided as part of their car insurance policy. If their insurer quotes a high cost additional premium, your PA may have to shop around for comparison quotes and ultimately choose an alternative car insurance provider if they are much cheaper. It is important that they do not take the risk of failing to arrange the correct business cover as it is their responsibility to do so.

2.2 What type of insurance should I have?

If your PA is required to drive your car as part of their job, you must ensure that your car insurance covers them to do so. This will be your responsibility to check or to arrange before asking your PA to drive your vehicle.

2.3 Checking relevant documents

For your own safety and peace of mind, it is recommended that you check the following documents before allowing your PA to drive as part of their work for you.

They must have:

  • a vehicle that is taxed
  • a current UK driving licence
  • valid car insurance including business use
  • an up to date MOT certificate for their vehicle

3. Mileage and other expenses

3.1 Mileage

If your PA drives their own car during the course of their work for you, you should pay them a mileage allowance e.g., a fixed cost per mile to cover the cost of fuel and wear and tear on their vehicle. You should NOT pay them mileage for their travel to and from their agreed place of work. It is also essential to obtain prior agreement from your budget provider before using funds from your budget to pay for mileage.

There is no set rule for how much you should pay per mile, but you will need to consider that your PA has to cover the cost of petrol, wear and tear on their car and possible additional insurance, when calculating how much to pay. The HM Revenue and Customs (HMRC) standard rates are currently:

                               HMRC rates per business mile*

Type of vehicle

First 10,000 miles

Above 10,000 miles

Cars and vans

45p

25p

Motorcycles

24p

24p

Cycles

20p

20p

 

*Please note these rates are subject to change but are correct as of September 2020  You can check them on HMRC’s website at  https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020#employee-vehicles-mileage-allowance-payments-maps

It is not recommended that you pay your PA the maximum mileage rate as this is rarely affordable within direct payments budgets. You should consider carefully how much mileage you will pay up to 45p per mile and whether this will be affordable for you

If you pay your PA more than 45p per mile any additional money, they receive will be subject to income tax and national insurance. If your PA receives the same or less than the amounts listed above, no tax or national insurance will usually be payable.

If you pay a mileage rate of less than 45p per mile, your PA can claim tax relief against their earnings on the difference at the end of the year. They will need to keep a record of all mileage payments claimed as business use and notify HMRC using form P87: Tax relief for expenses of employment. This form is available to complete online from the HMRC website at: http://www.hmrc.gov.uk/forms/p87form.htm

3.2 Additional costs

You should also reimburse your PA for normal parking charges incurred on your behalf.

If your PA receives a parking fine or speeding fine in the course of using either their car or your own for work related duties, they will be responsible for payment of this. If they drive your car, you may receive a summons because you are the registered owner of the vehicle that they were using, but as the driver they are legally responsible, and you must report this to the authority concerned. Fines should never be paid using your direct payment money.

3.3 Record keeping

You will need to keep a written record of all mileage claims made by your PAs, for HMRC purposes. As of September 2020, HMRC advise that you should keep details such as these for at least five years after the tax year they were incurred. Independent Lives has a mileage record sheet available that you can use for these purposes PA mileage record sheet - employer template 3.6.

PA mileage record sheet - employer template 3.6

Your PA should submit their mileage claims along with the rest of their expenses using PA expenses claim form - employer template 7.7. They do not need to provide receipts for mileage claims; however they must note the start and end point of the journey, the purpose of the journey and the total number of miles on their expenses claim e.g. Worthing – Shoreham 5 miles.

PA expenses claim form - employer template 7.7