Car fuel Allowance ??????

[pmrush]

Hello,

This is my first post on this site, so hello to everybody.

I've just claimed for fuel allowance at work for 2007/2008 this is my own car used for work related driving to and from jobs

i did 11,165 miles business miles

my employer pays me 19p per mile

so i can claim 40p per mile back of the goverment upto 10,000 miles
after that 25p per mile

10,000 @ 40p = £4000
1165 @ 25p per mile = £291.25

total = £4291.25

Less the 19p per mile my employer pays 19p@ 11,165 miles = £2121.35

Leaves a difference of £2169.90

am i entitled to the full £2169.90 or am i taxed on this amount.

I received a cheque for £499.40 from the tax people and i'm not sure how they reached this figure.

I have phoned them today but they were hopeless and didn't really know

Any body clarify my position on this and confirm how much i should of received.

Thanks for the Help.


Paul.

[Conor]

Because you're entitled to TAX RELIEF on that amount, not the amount itself.

Say for example you earn £20,000 per year but claim 10,000 miles at 40p per mile which is £4000 as your employer doesn't pay you anything. That is classed as being taken off your gross income so in effect, you get £4000 of your wages tax free. Income tax is 20% of that £4000 so you would get a cheque back for £1000 because you've paid income tax based on £20,000 but after mileage allowances have been taken off, your taxable pay is actually £16000 so you've paid too much tax. Its the tax you've overpayed which gets refunded.

As your employer reimburses you to some extent, you can only claim the balance of the pence per mile allowance as you've rightly said. You'll not have paid tax on the portion your employer has reimbursed you as they will have listed it as a tax free expense.

Basically, the cheque you get should be 20% of what you claim is the expense if your income is under the higher tax bracket and this is what you've received.

[redux]

Leaves a difference of £2169.90

am i entitled to the full £2169.90 or am i taxed on this amount.


Neither. That's the allowance your tax code would be adjusted by, and hence you'll get tax relief on that.

[pmrush]

Cheers for the quick response guys,

Disappointed by them though, my employer told me when i started i would be entitled to claim the full 21p back.

looks like its time to stop using my car then, with diesel at £1.29+ it's costing me roughly 13p a mile now and its only going to go up.

i'm getting 6p per mile for wear and tear....lol:eek:

for tyres and servicing a year your looking at £500+ repairs.


thanks for the help.

Paul.

[standupguy]

I think your employer is taking the "p"

You should be receiving some sort of monthly allowance for your car (which would be taxable in your salary) in addition to the mileage allowance.

Otherwise you should be getting a much higher mileage allowance if you were to include wear and tear on the vehicle etc.

Your employer may think that the tax man pays you the extra but as you see he doesn't. Your employer may be unaware of this or he may just be trying to get away with paying less out

It may be an idea to discuss this with your employer if he needs you to continue to use your car between jobs

If he did not want to pay a car allowance on top, he could pay you say 40p per rmile which is more in line with your costs.

Whilst you would then not have any extra tax allowance at least you will receive an extra 21p per mile tax free?

[AdrianHi]

my employer pays me 19p per mile

I don't think you could run a 7 year old 1.0 L city car for 19p + tax relief on the other 21p.
Your employer is robbing you blind on car use expenses here, if I were you I'd march into the HR dept. and obstinately refuse to drive one more business mile until they pay up the full 40p per mile with a promise to increase it when the government does.
Your being bleed dry here as your car depreciates, you not receiving enough compensation which will enable you to replace the car when it wears out.

[Conor]

Anyone else here betting that the employer is putting through 40p a mile on their books?

[beachlou]

Sorry to butt in on your thread, but can I ask how you go about getting the money for milage? Bascially, my H2B gets paid 14.4p per mile (I know how poor this is) and any extra money we could get at the moment would be fantastic. He did just over 23,000 business miles for 07/08. Can he claim? If so, how does he claim? We're rather confused over it all.

Many thanks

[Conor]

Download, print out and fill in a P87 "Tax relief of Expenses of Employment " form from the HMRC website (http://www.hmrc.gov.uk/forms/p87.pdf). Work it out as 10,000 miles at 25.6p a mile and 13,000 miles at 10.06p per mile.

Send it to the tax office address shown on the P60.

[Bob63]

Income tax is 20% of that £4000 so you would get a cheque back for £1000
Sorry for being pedantic but if the OP is claiming back the last tax year when income tax was 10%, 22% or 40% depending on income. This year it is 20% or 40%.

At 22% the OP would get back £477 from the claim of £2169 - pretty close the amount received. The £22 difference could be explained by a minor PAYE overpayment for the year on something else.

Mike

[beachlou]

Download, print out and fill in a P87 "Tax relief of Expenses of Employment " form from the HMRC website (http://www.hmrc.gov.uk/forms/p87.pdf). Work it out as 10,000 miles at 25.6p a mile and 13,000 miles at 10.06p per mile.

Send it to the tax office address shown on the P60.

Perfect-many thanks.

Does anyone know how long approximately it takes to all go through (assuming everything goes without a hitch)?
Thanks

[AdrianHi]

Perfect-many thanks.

Does anyone know how long approximately it takes to all go through (assuming everything goes without a hitch)?
Thanks

Not sure but will be doing it for my wife very soon.
You should have a nice little wind fall coming with 23,000 business miles.
When you fill out the P87 it asks you for the miles you've done and what your employer has paid you, they work out the rest.

You should also phone the tax office and ask them for forms to claim for any past years where you may be entitled to this tax releif. I'm not sure how many years you can go back, 5 or 6 at most I'm guessing. I think there is a fair bit of tax releif coming your way, but you might not get it all at once, you may find they reimburse some of it by adjusting your H2B's tax code so you get it back over the course of a year.

[beachlou]

Not sure but will be doing it for my wife very soon.
You should have a nice little wind fall coming with 23,000 business miles.
When you fill out the P87 it asks you for the miles you've done and what your employer has paid you, they work out the rest.

You should also phone the tax office and ask them for forms to claim for any past years where you may be entitled to this tax releif. I'm not sure how many years you can go back, 5 or 6 at most I'm guessing. I think there is a fair bit of tax releif coming your way, but you might not get it all at once, you may find they reimburse some of it by adjusting your H2B's tax code so you get it back over the course of a year.

Excellent, many thanks. I didn't realise you could back date it either, as he has 2 years worth of milage at about 23,000 a go. Fantastic!! Better start filling out the form. So glad I found this thread :T

[Lynatali]

Hi I am new to this and need help please re fuel allowance.

I have a company car and have done 18,702 business miles since last October to the end of May 08. My company pay me a measly 11p per mile. As diesel continues to go up on a weekly basis I contacted the tax office and have been sent a P87 form. I am unclear as to whether I can claim back the difference of the HMRC rates of 40p for first 10,000 miles than 25p thereafter. I have had conflicting advice and unsure what the answer is on this?

Can I claim anything back???? A present I am seriously out of pocket.

[redux]

No, the 40 pence allowance is for people being refunded for business use of their own car

On the taxation of company cars, you get taxed on the deemed value of benefit-in-kind.

Some people get free fuel as well, which is also taxed as a deemed lump sum value, but many find that rather high for their use, and paying the fuel themselves and claiming back the business cost is better for them.

Who pays for your car's tax insurance tyres servicing and repairs? If it's your employer, I doubt you'd be thought to be a lot out of pocket. I think you need to agree a new fuel rate with your employer, though 11 pence a mile would be 54 mpg so perhaps not so far away

[AdrianHi]

Hi I am new to this and need help please re fuel allowance.

I have a company car and have done 18,702 business miles since last October to the end of May 08. My company pay me a measly 11p per mile. As diesel continues to go up on a weekly basis I contacted the tax office and have been sent a P87 form. I am unclear as to whether I can claim back the difference of the HMRC rates of 40p for first 10,000 miles than 25p thereafter. I have had conflicting advice and unsure what the answer is on this?

Can I claim anything back???? A present I am seriously out of pocket.

New rates apply tio you from 1 July 2008 here:
http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

This is what applies previous to this date:
http://www.hmrc.gov.uk/cars/advisory_fuel_archive.htm which is 11p per mile for a diesel up to 2000cc.
I think your employer is paying you all they can right now, watch for it going up from 1 July 2008 though.

I don't think you are "seriously" out of pocket (yet), for my 46mpg diesel fuelling it went past 11p per mile around February time. I would say fuelling a 46mpg diesel has already risen above 13p per mile now though :(

[leehal]

New rates apply tio you from 1 July 2008 here:
http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

This is what applies previous to this date:
http://www.hmrc.gov.uk/cars/advisory_fuel_archive.htm which is 11p per mile for a diesel up to 2000cc.
I think your employer is paying you all they can right now, watch for it going up from 1 July 2008 though.

I don't think you are "seriously" out of pocket (yet), for my 46mpg diesel fuelling it went past 11p per mile around February time. I would say fuelling a 46mpg diesel has already risen above 13p per mile now though :(

My understanding is that those rates are for guidance for companies in relation to charging compnay car users when they do private mileage in company cars or to give an indication of fuel costs per mile for their accounts purposes. They don't seem to relate to using your own car for business use.

Taken from the guidance notes :-

Use of advisory fuel rates

The advisory fuel rates (guidelines on fuel only mileage rates for company cars) were first published in January 2002. It has been possible to use them since then to negotiate dispensations for mileage payments for business travel in company cars.
They are intended to reflect actual average fuel costs at the time they are set. The aim is to save time for both employers and HMRC by setting out some figures that can be used in the majority of cases. They give employers more certainty about what the mileage rates that they choose to apply mean for tax and National Insurance contributions (NICs).
The rates only apply where employers:

reimburse employees for business travel in their company cars, or
require employees to repay the cost of fuel used for private travel.The rates do not apply in any other circumstances. In particular, employees driving company cars are not entitled to use them to calculate a deduction if employers reimburse them at lower rates. Such calculations should continue to be based on actual costs incurred.

[AdrianHi]

My understanding is that those rates are for guidance for companies in relation to charging compnay car users when they do private mileage in company cars

Only on the fuel they use if they also have all fuel paid for by the company. Company car drivers pay BIK (benefit In Kind) tax for the benefit of having the use of the company car for private use.

or to give an indication of fuel costs per mile for their accounts purposes. They don't seem to relate to using your own car for business use.

Yes correct, there are different allowances for using your private car for business use. Those tax free expense allowances are 40p per mile first 10,000 miles then 25p thereafter. If your employer pays less than this you can claim tax relied on the difference using form P87.

I posted the link to this in the context of this situation:

reimburse employees for business travel in their company cars, or
where as a company car user you choose not to take a fuel card and have all your fuel paid (paying another hefty tax) but pay fuel yourself and reclaim fuel expense mileage allowance only from your employer.
Employees who do have a company fuel card may also choose to repay the cost of
fuel for private mileage using these rates.

[rossc_84]

Hi - I hope someone can help!!

I started a new job where I have to use my own car for business use. I currently have to pay for fuel myself and reclaim it at 13p per mile(I drive a 1.6 petrol). I have seen that I can reclaim some money from the inland revenue, however I am slightly confused as to the amount!! I do about 35000 business miles per year and I worked it out the benefit came out at £5700....how much of this do I actually get back? I am not on a higher tax bracket and get £200 per month car allowance also.

Any clarification on this would be a great help!

[AdrianHi]

Hi - I hope someone can help!!

I started a new job where I have to use my own car for business use. I currently have to pay for fuel myself and reclaim it at 13p per mile(I drive a 1.6 petrol). I have seen that I can reclaim some money from the inland revenue, however I am slightly confused as to the amount!! I do about 35000 business miles per year and I worked it out the benefit came out at £5700....how much of this do I actually get back? I am not on a higher tax bracket and get £200 per month car allowance also.

Any clarification on this would be a great help!
13p per mile is probably only just enough to cover fuel right now.
You definitely need to be filling out HMRC form P87 at the end of each tax year.
You should be able to receive tax and NI (I think, can anyone confirm this want to know myself?) relief on £5700 so should work out at about £1710 a year (approx. 20% PAYE and 10% NI), worst case £1140 (PAYE only) which you will have to wait to claim back.
Not exact figures but gives you an idea what you should get back.
If you consistently make this claim or you talk to your HMRC office in advance and tell them you will always be doing this business mileage they may change your tax code instead (happened to a past work colleague of mine) which means you receive the tax relief each month in the form a reduced tax payments - which means you get the money back straight away instead of having to wait until the end of the tax year plus a few months processing time for it.

[tinkerbell84]

^^ You can claim the tax, not NI.