Mileage Expenses Review FAQs

Mileage expenses

Frequently asked questions

1)     How does the proposed system for reimbursing mileage expenses work?

Under the proposed arrangements, the same reimbursement rates would apply to all staff, regardless of how many business miles they travelled each year.  The NHS Staff Council would set the rates in partnership, based on the motoring costs published by the AA and would review them  twice a year, moving them up or down to ensure they were in line with current motoring costs.

2)     Why are you proposing to use the AA guides to inform NHS rates – how would this work?

The AA (Automobile Association Trust) is regarded as an independent expert on motoring and motoring costs campaigning extensively and utilising the latest evidence.  Each year the AA produces illustrative guides of motoring costs which are regarded as authoritative.  These set out the elements of costs involved in running a car for a typical car owner using his or her vehicle for normal “domestic” purposes e.g. travel to and from work, shopping trips and holidays.  The NHS Staff Council proposes to use the AA guides as the source of its estimates of the costs of business mileage.

The AA guides provide different illustrative costs for private car use based on a range of different annual mileages and cars in different price ranges The NHS Staff Council is proposing to use the AA figures for cars in the middle price range and an assumed annual combined private and business mileage of 10,000 miles, as a basis for all the cost items which would be taken into account.

3)     Have the proposals been agreed?

The NHS Staff Council, which includes representatives of the NHS trade unions, employing organisations, and all the health departments have agreed that the proposals should now be for trade union consultations.

4)     What happens next and when?

The NHS trades unions are now consulting on the proposals.  If agreed, the proposals will be incorporated into the NHS terms and conditions of service handbook.  The new rates of reimbursement and the qualifying conditions would apply to journeys made on and after 1 July 2013.

5)     Why review the current system?

The mechanisms for reimbursing travel expenses for NHS staff have not been formally reviewed since 2000.  There is no system for measuring costs and ensuring that reimbursement is appropriate.  The NHS Staff Council needed to agree new arrangements to update this element of the NHS terms and conditions of service and to ensure that the rates of reimbursement continue to be in line with costs.

6)    Why is the proposed new system of reimbursement being proposed better than the old one?

The old system did not include a method for estimating the cost of business motoring and setting rates of reimbursement in line with costs.  It also had a different rate for frequent and infrequent travel. The proposed new system uses the AA guides as a basis upon which to calculate and review reimbursement rates and it would apply the same rate to all staff.

7)    Motoring costs – like petrol costs – can change frequently.  How would the new system take this into account??

The NHS Staff Council would review motoring costs twice each year in April/May and October/November, using the latest information produced by the AA which would take into account the cost of fuel and keeping a car on the road.  If these reviews showed that reimbursement rates needed to change in line with the AA guides, new rates would apply from 1 January and 1 July respectively.

8)    Who would the new arrangements apply to? 

All staff on the terms and conditions of service in the NHS Terms and Conditions of Service Handbook.

 

9)     If agreed, when would the new arrangements start?

They would apply to journeys made on and after 1 July 2013.

10)  Why would staff have to wait until July 2013 for the new arrangements to start?

The NHS Staff Council wants to give staff sufficient notice of the changes, before they are implemented.  This will give staff and employers the opportunity to plan for implementation.

 

11)  Are the provisional reimbursement rates published as part of the consultation, the ones which would apply on 1 July 2013?

No.   We have published these to give staff an indication of rates – based on current AA guides – that they would get now if the proposed system was implemented immediately.  The new system includes a built-in review of rates twice a year, when the new AA guides are published. On this basis, the rates that would apply on 1 July 2013, would be based on the most up-to-date rates published in the latest AA guide in April/May 2013.

12)  How often would business motoring costs be reviewed?

The NHS Staff Council would review the costs of business motoring twice a year in April/May and October/November, following the publication of the latest AA guides on motoring costs.

13)  How would these reviews work?

In April/May the NHS Staff Council would use the latest estimates of the costs of motoring published by the AA in their latest guides to check the current rates of reimbursement for NHS staff.  If there was a change in overall motoring costs that in turn, produced a five per cent change – up or down –  in reimbursement rates new rates would be implemented on 1 July.   The same would apply in the second review in October/November – if it resulted in a five per cent change in rates, up or down, new rates would be effective on 1 January following the review.

 

14) How would the costs of business motoring be calculated in the new system?

The NHS Staff Council would use the AA’s illustrative guides to motoring costs as the source of its information on the costs of business mileage.  The AA guides take into account all elements of costs involved in running a car, for a typical car owner using their car for normal domestic purposes.  The NHS Staff Council would base rates on the AA figures for cars in the middle price range and a combined private and business mileage of 10,000 miles per year.

15) Why won’t the new system link rates of reimbursement to engine size?

The AA does not take account of engine size when producing its illustrative estimates of motoring costs – bigger engines in new cars are often more fuel efficient than smaller engines in old cars. On this basis, the NHS Staff Council believes this is no longer a reliable way of estimating costs

16)  What about costs for motorcycle users?

The new system contains rates of reimbursement for motorcycle users which would be linked to rates for car users.

17)  What about rates of reimbursement for lease car users?

Arrangements for the provision of leased cars to NHS staff, would continue to be the responsibility of partnership discussions between employers and staff side representatives and informed by HMRC published recommended rates.

18)     Why are there no lump sums in the proposed new system?

Feedback from employers and trade unions in our 2009 consultation, said they would prefer a system which reimbursed all business motoring costs through a fixed rate of reimbursement per mile travelled.  This would be a simpler, fairer and more transparent method of reimbursement which would apply to all staff.

19)     What if I started doing more business miles at work?

The new rates of reimbursement would be paid for each business mile travelled.  If an individual did more business miles, the overall amount of reimbursement would increase.

20)     What if I changed my car?

This would not affect the reimbursement staff received for the costs of the business miles they travelled for work.

21)         Why would the rate of reimbursement drop after 3,500 miles?

This is the point at which employers and staff need to discuss the possibility of lease pool or hire cars.  We also believe that this is the level at which the “standing costs” for running a vehicles have been met.  To continue to pay a full rate of reimbursement for all miles travelled would run the risk of putting some people into profit when using their vehicle for work.