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40p per mile fuel refund... Tax free?
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madfrenchgirl
Posts: 1,729 Forumite
in Cutting tax
Hi,
My company is moving me to a different assignement and they have to pay me the fuel @ 40p per mile. Which means:
42 miles @ 40p x 40 time a month = £672 per month
YOOHOO
that will cover for my living expenses... which means a massive saving at the end of the month.
Only thing is: it seems too good to be true. My current boss told me that this money was tax-free as it was expenses. BUT IS THIS REALLY TRUE?
PLEASE TELL ME IT IS FELLOW MSE!
My company is moving me to a different assignement and they have to pay me the fuel @ 40p per mile. Which means:
42 miles @ 40p x 40 time a month = £672 per month
YOOHOO
that will cover for my living expenses... which means a massive saving at the end of the month.
Only thing is: it seems too good to be true. My current boss told me that this money was tax-free as it was expenses. BUT IS THIS REALLY TRUE?
PLEASE TELL ME IT IS FELLOW MSE!
"Don't cry, Don't Raise your Eye
It's only teenage wasteland"
The Who - Baba O'Riley
Who's Next (1971)
RIP Keith Moon
RIP John Entwistle
It's only teenage wasteland"
The Who - Baba O'Riley
Who's Next (1971)
RIP Keith Moon
RIP John Entwistle
0
Comments
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hi....
YEP travel expenses are tax free you'll be pleased to hear.
we pay several people travelling expenses here at work...howver i beleive there is a limit i'l see if i can find it and let you know.
jeeves0 -
This may not be quite as good as it seems. Payments made for business miles made in an employee's own car are not subject to tax if they do not exceed the rates laid down by legislation. The 40p per mile relates to the first 10,000 miles in a year and the rate drops to 25p for the rest.
Firstly I assume that the mileage you quote is all "business" mileage. (Remember that home to work is counted as private.)
42 x 40 miles a month works out at over 20,000 miles a year. How long will you be on this assignment?
Also don't forget that, depending on the car you drive, you could be buying £180 to £200 of fuel every month just for these business miles. And tyres, etc. will need replacing more often.
But basically your boss is right. Hope it all goes well with you.
RegardsIf it’s not important to you, don’t consume it0 -
i am supposed to be there for 6 months so about 10000 miles... i am aware that my car will need some rework and some extra servicing etc... and I have included this in my long -term plans. it is a corsa 1.2 R reg and it is very efficient, does about 400 mile son a tank on the motorway and 350 city driving.
even if they keep me on this assignment afterwards and the rate drops to 25p per mile, it is still a bargain!
There is about 45 miles from my place to my new workplace and only 3 miles from my place to my "Base location", so they have to refund me 42 miles, right?
thx for the info guys."Don't cry, Don't Raise your Eye
It's only teenage wasteland"
The Who - Baba O'Riley
Who's Next (1971)
RIP Keith Moon
RIP John Entwistle0 -
Even if you are there for more than 10,000 miles worth your company can still pay you 40p per mile if they want to - the extra 15p per mile would be taxable but hey - still better than nuttin!0
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oh no, the company will only repay me 25p after the first 10,000 miles. Do not expect CSC to make you a big gift! they hardly promote anyone and prefer paying k£ to get people out of other companies... a bit silly iniit?"Don't cry, Don't Raise your Eye
It's only teenage wasteland"
The Who - Baba O'Riley
Who's Next (1971)
RIP Keith Moon
RIP John Entwistle0 -
madfrenchgirl wrote:i am supposed to be there for 6 months so about 10000 miles... i am aware that my car will need some rework and some extra servicing etc... and I have included this in my long -term plans. it is a corsa 1.2 R reg and it is very efficient, does about 400 mile son a tank on the motorway and 350 city driving.
even if they keep me on this assignment afterwards and the rate drops to 25p per mile, it is still a bargain!
There is about 45 miles from my place to my new workplace and only 3 miles from my place to my "Base location", so they have to refund me 42 miles, right?
thx for the info guys.
If your employer agrees to pay the full mileage from home to your temporary workplace, you are able to receive this tax free, when it is within the statutory limits. This is because an exception is made for travelling to a temporary workplace:
http://www.hmrc.gov.uk/manuals/senew/SE32075.htm
ordinarily travel from home to work would be considered private and although the employer could pay it, it would be taxable in full.
Here's the link to the relevant part of the Inland Revenue manual on travel expenses:
http://www.hmrc.gov.uk/manuals/senew/SE32005.htm0 -
Its worth checking through the details on the links provided by telly-addict. From what you have posted it sounds like a temporary workplace, which is likely to last less than 24 months, and consequently you can claim a tax deduction for travel expenses. However the rules are extensive and complex, and it's better to check.if i had known then what i know now0
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just read it it should be ok... I am officially based 3 miles away from my place. So I guess it s all good, thx a lot guys for the advice!"Don't cry, Don't Raise your Eye
It's only teenage wasteland"
The Who - Baba O'Riley
Who's Next (1971)
RIP Keith Moon
RIP John Entwistle0 -
And if you were self employed and VAT registered you could claim back a small amount of VAT as well!!
However, someones watching - our European masters don't think we (UK) are playing fair ...
http://www.thisismoney.co.uk/small-business/article.html?in_article_id=401077&in_page_id=100 -
Hello,
My partner and I work for a company just south of Birmingham. In October 2003, my partner commuted to London once a week for 3 months. In my calculations that's about 120 miles to London @40p x 12 times between October 2003 and January 2004. We didn't claim tax relief in last year's self-assessment. Would we be able to claim tax relief in next year's self-assessment as we weren't aware we could claim tax back?:rotfl: :dance: _party_ :grouphug: Laughing all the way...:EasterBun :kisses3:0
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