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What's this - essential car user
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# 1
poppyoscar
Old 29-06-2008, 11:00 AM
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Default What's this - essential car user

yesterday i received a letter from HM rev and customs - it's a P11D expenses and benefits 2007-2008.

In the mileage allowance and passenger section there is a sum of £280.66. something to do with payments in excess of the exempt amount....

what is it? i'm an essential car user for a county council, earning a pittance, and the petrol prices are already leaving me out of pocket.......it just says to keep the paper for my next tax return.......but i want to know what it is!!!!!

PO xx
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# 2
BoGoF
Old 29-06-2008, 11:09 AM
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Your employer must be paying you more than the authorised rates of 40p per mile for the first 10,000 miles and 25p thereafter. If they do this the excess is liable to income tax and once the P11D is received by HMRC they will issue you with a tax calculation to recover it - unless a restriction is already in your tax code.

Also the P11D comes direct from your employer not HMRC
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# 3
Francophile
Old 29-06-2008, 11:09 AM
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I'd be interested in the answer to this as well as my DH works for the council as well and gets the essential car user allowance.
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# 4
poppyoscar
Old 29-06-2008, 11:13 AM
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we get a lump sum of about 70 a month which i believed to be W&T, and then about 35p a mile i believe although it seems to vary slightly.

perhaps they should just give us a car!!!!

PO xx
2010 MFW Challenge No. 112 Mortgage paid in full 27/08/10 I'm MF!!!
New target 5340 in ISA by April 2012 5340/5340 100% 05/10/11
No 17 Lewis Lane
Holiday fund 801 (Christmas cruise booked and miraculously paid for!)
NEW SAVINGS TARGET - 25000 by 31/12/2012 10840/25000 43% Premium Bonds 500 (Winnings to date 0)
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# 5
BoGoF
Old 29-06-2008, 11:15 AM
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Is the 70 taxed.....and how many miles did you do in the last tax year ?
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# 6
poppyoscar
Old 29-06-2008, 11:30 AM
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I don't know if it's taxed or not!
Need to dig out some pay slips and try and work out if it is.

I did around 3000 miles from Sept-March - only started job in September.

I have a colleague who has done way more miles than me, but her amount is about half mine!:confused:

PO xx
2010 MFW Challenge No. 112 Mortgage paid in full 27/08/10 I'm MF!!!
New target 5340 in ISA by April 2012 5340/5340 100% 05/10/11
No 17 Lewis Lane
Holiday fund 801 (Christmas cruise booked and miraculously paid for!)
NEW SAVINGS TARGET - 25000 by 31/12/2012 10840/25000 43% Premium Bonds 500 (Winnings to date 0)

Last edited by poppyoscar; 29-06-2008 at 11:33 AM.
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# 7
BoGoF
Old 29-06-2008, 11:37 AM
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OK, so if you did 3000 miles, the max they can pay using the authorised rates is 3000 @ 0.40 = 1200. So if they paid you 3000 @ 0.35 = 1050 plus 70 per month x 7 = 490, giving a total paid to you of 1540, this would mean a surplus amount of 340, assuming that the 70 per month has not been taxed through your salary. Slightly different figure from your P11D. The only people that can explain the 280.66 is your employer but the above method is the way to calculate it.
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# 8
poppyoscar
Old 29-06-2008, 11:45 AM
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ohhhhhhhhh ok, i seeeeeeeeeeeeeeeee!!

so, i basically need to do more miles!!! the county council will be pleased! (not!!) :rolleyes:

thanks for your input!

po xx

EDIT - do you know when I'll have to pay this? and will it be a lump sum? I have never had to fill in a tax return.
2010 MFW Challenge No. 112 Mortgage paid in full 27/08/10 I'm MF!!!
New target 5340 in ISA by April 2012 5340/5340 100% 05/10/11
No 17 Lewis Lane
Holiday fund 801 (Christmas cruise booked and miraculously paid for!)
NEW SAVINGS TARGET - 25000 by 31/12/2012 10840/25000 43% Premium Bonds 500 (Winnings to date 0)

Last edited by poppyoscar; 29-06-2008 at 11:46 AM. Reason: thought of a question
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# 9
Smi1er
Old 29-06-2008, 1:07 PM
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You might be able to offset more as well. How much did your insurance go up when you told your insurance compoany that you used your car on company business?
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# 10
longforgotten
Old 30-06-2008, 7:45 PM
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The deal is that when an employer re-imburses an employee for using their car for the business its all in, i.e the 40p per mile is to cover fuel, repairs, insurance, mot etc etc.

Many employers do not care that the actual cost per mile to the employee maybe higher than the re-imbursement, hence some employers pay out much less than 40p per mile.

Accurate mileage figures must be kept to back up mileage payments to employees otherwise the whole lot should be taxed under paye and will not be classed as a re-imbursement. To have 70 per month, for instance, and it not be taxed, there must be mileage figures kept to back it up ( but then perhaps the mileage is the same every month )
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