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Claiming mileage charge over 40p per mile
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# 1
nigreeves
Old 13-04-2008, 8:16 PM
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Default Claiming mileage charge over 40p per mile

My wife recently went self employed.
I understand she can claim 40p per mile for using her car.
Petrol prices have increased considerably.
Is there any way she can claim more than 40p per mile to reflect the inflationary uplift in petrol charges
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# 2
fengirl
Old 13-04-2008, 8:24 PM
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She cannot claim anything, but what she can do is to include a deduction in her accounts for the use of her car.
If she is not VAT registered, she can include 40p permile for the first 10,000 miles and 25p per mile thereafter.
Alternatively, she can include in her accounts the full costs of running the car - fuel, oil, repairss, insurance, tax, etc etc. Then when she does her tax return, she would need to add back the proportion of the car running costs relating to private use. Its therefore important that she keeps a record of all private mileage.
If this method is chosen for car running costs, she will also claim capital allowances on her tax return, whihc is a method of allowing for depreciation of the vehicle.
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# 3
mitchaa
Old 14-04-2008, 7:53 AM
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Quote:
Originally Posted by nigreeves View Post
My wife recently went self employed.
I understand she can claim 40p per mile for using her car.
Petrol prices have increased considerably.
Is there any way she can claim more than 40p per mile to reflect the inflationary uplift in petrol charges
Are you having a laugh? You dont think 40ppm is reasonable already?

500 miles would get you back 500x0.4 = 200.

Now does it cost 200 to fill your wifes tank? Does it cost half of this? Does it even cost a 1/4 of this?

See what im getting at. Even if petrol/diesel went upto 2-2.50 p/l you would still be considerably better off.

No pleasing some people:rolleyes:
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# 4
Elaine_Wilson
Old 14-04-2008, 9:48 AM
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Quote:
Originally Posted by mitchaa View Post
Are you having a laugh? You dont think 40ppm is reasonable already?

500 miles would get you back 500x0.4 = 200.

Now does it cost 200 to fill your wifes tank? Does it cost half of this? Does it even cost a 1/4 of this?
I saw your smiley and assume this was tongue in cheek but it made me consider my own position.

A tankful of petrol costs me over 50 and I get a bit over 300 miles from this so I reckon that's about 18p per mile.

Tax, insurance and MOT come to 9p.

Ideally, I would like to keep this car for 11 years (or more), giving me a depreciation charge of 500 per year, or 7p per mile.

This leaves about 6p per mile to cover servicing, tyres, etc.

Blimey, I hadn't realised how tight the 40p figure is.
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# 5
mitchaa
Old 14-04-2008, 10:35 AM
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Well a tankful of diesel costs me £50 and i get 600 miles from this.

That works out at 8.3p per mile

Unless your car is purely for business use, which 99% of the time it is not, then you have to accept insurance, tax, depreciation and servicings just like everyone else.

Claiming 40p for something that costs me 8.3p, i certainly would not be whinging. Yes wear and tear, insurance, servicings, etc but this needs to be split for personal/business use.

You gain financially from the 40p rule, dont kid yourself that you do not.

Last edited by mitchaa; 14-04-2008 at 10:51 AM.
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# 6
wolvoman
Old 14-04-2008, 2:35 PM
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Quote:
Originally Posted by mitchaa View Post
Well a tankful of diesel costs me 50 and i get 600 miles from this.

That works out at 8.3p per mile

Unless your car is purely for business use, which 99% of the time it is not, then you have to accept insurance, tax, depreciation and servicings just like everyone else.

Claiming 40p for something that costs me 8.3p, i certainly would not be whinging. Yes wear and tear, insurance, servicings, etc but this needs to be split for personal/business use.

You gain financially from the 40p rule, dont kid yourself that you do not.
I presume by the tone of your responses that you don't do much driving for work purposes?
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# 7
Doh
Old 14-04-2008, 3:42 PM
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Quote:
Originally Posted by wolvoman View Post
I presume by the tone of your responses that you don't do much driving for work purposes?

i was thinking the same! the OP is correct with the current rises in fuel and now car tax, 40p is very close to the mark for some circumstances! My car isn't particularly economical (the greenies will kill me) costing 24p per mile just in fuel!

saying insurance etc has to be paid anyway is wrong, insurance, servcing, tyres, etc all cost more the more business use you do, so has to be factored into the 40p... the extra business miles also increase depreciation, compounding the problem!

this rate hasn't changed since about 2001 IIRC i'm sure everyone will agree the costs of motoring has risen considerably since then! its just another way of HMRC cashing in on the sly
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# 8
DKLS
Old 14-04-2008, 3:49 PM
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She can pay herself whatever she likes per mile, but anything over the 40p a mile for the 1st 10K and 25p per mile after that will have to be declared on a P11D, and would be taxed.
If she wants to cover the rising prices of fuel, she needs to calculate this in when doing her quotes.
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# 9
Possetjohn
Old 14-04-2008, 8:30 PM
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Quote:
Originally Posted by mitchaa View Post
Are you having a laugh? You dont think 40ppm is reasonable already?

500 miles would get you back 500x0.4 = 200.

Now does it cost 200 to fill your wifes tank? Does it cost half of this? Does it even cost a 1/4 of this?

See what im getting at. Even if petrol/diesel went upto 2-2.50 p/l you would still be considerably better off.

No pleasing some people:rolleyes:
Actually as stated in a subsequent post you don't 'get back' 40p per mile, but you are allowed to deduct business mileage at 40p per mile for the 10,000 miles and subsequent miles @ 25p per mile as a business expense. That means you 'get back' 40p x 20% = 8p per mile if you are a basic rate tax payer or 40p x 40% =16p per mile if you are a higher rate taxpayer.

If you calculate the current cost of running a car including all costs over 10,000 miles per year you will find 40p/mile barely covers costs for an ordinary car.

See this link for the AA calculation for a petrol car

http://www.theaa.com/allaboutcars/ad...trol_table.jsp

Or Diesel

http://www.theaa.com/allaboutcars/ad...esel_table.jsp

Of course if you are employed and your employer pays 40p per mile (if you are lucky!!) for business use of your own car the you get the whole 40p/mile tax free!!
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# 10
BoGoF
Old 14-04-2008, 8:56 PM
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From the original post she is going self-employed so I would say DKLS's reply is n/a as she is not an employee, unless she goes ltd.

As a self-employed person she can either claim the actual running costs of her car for business purposes ie capital allowances, servicing, fuel costs etc - obviously apportioned to business use OR she can use the approved mileage rates mentioned. However once a particular method has been adopted then you have to stick with that, you cannot chop and change to whatever is to your advantage each year.
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# 11
pigeonshouse
Old 23-08-2008, 4:29 PM
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Quote:
Originally Posted by Doh View Post
i was thinking the same! the OP is correct with the current rises in fuel and now car tax, 40p is very close to the mark for some circumstances! My car isn't particularly economical (the greenies will kill me) costing 24p per mile just in fuel!

saying insurance etc has to be paid anyway is wrong, insurance, servcing, tyres, etc all cost more the more business use you do, so has to be factored into the 40p... the extra business miles also increase depreciation, compounding the problem!

this rate hasn't changed since about 2001 IIRC i'm sure everyone will agree the costs of motoring has risen considerably since then! its just another way of HMRC cashing in on the sly
The HMRC isn't 'cashing in'. They're not paying you your business mileage for you are they? If it costs more than 40p per mile to run your business then that's your own problem.
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# 12
steveo1967
Old 29-08-2008, 12:26 PM
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Hello,

The company I work for only pays £0.35 per mile for any mileage I do in my own personal car (yes sad I know).

Am I correct in thinking that I can claim back an additional £0.05 per mile from the tax man ? ... and if so how do I go about doing so ?
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# 13
stphnstevey
Old 29-08-2008, 12:57 PM
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Stating running costs in pence per mile is not very accurate as it complete depends on how many miles that person is doing - (ie 1 mile a year 9p for running costs is ridiculous and at the other end of the spectrum 100,000 miles is £9000)

I average about 10p cost in petrol per mile. I am fortunate enough to own my own company and pay myself 40p per mile first 10K miles and 25p after. As I do 20,000/yr, this leaves

30p X 10000 = £3000
15p X 10000 = £1500

or £4500 per year

Road Tax £150
Tyres £50
Maintenance £250
Service £200
Insurance £250
TOTAL £900

So I actually make £3,600 a year!

My car only cost £7,000 (interest free for 3yrs) which I run over 3yrs.

So over 3yrs it more than pays for itself, plus a small profit and I then 'give' the car to my wife as she would not normally be able to afford a newish car.

-------------------------
This is how I make it work

If you want
- A more expensive car
- Keep the car for longer
- Get paid less per mile

Then you have to do the figures yourself and see if it works for you. But everyone's situation is going to be different.

You can't expect the Goverment to account for everyone's situation and if your smart, you can easily make this work (quite substantially well)

Last edited by stphnstevey; 29-08-2008 at 1:13 PM.
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# 14
Andy L
Old 29-08-2008, 1:15 PM
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Quote:
Originally Posted by steveo1967 View Post
Hello,

The company I work for only pays 0.35 per mile for any mileage I do in my own personal car (yes sad I know).

Am I correct in thinking that I can claim back an additional 0.05 per mile from the tax man ? ... and if so how do I go about doing so ?
Not quite, you can claim the tax back on that 5p, i.e. 20% or 40% depending on which band you are in.
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# 15
steverothery
Old 15-03-2009, 4:14 PM
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Quote:
Originally Posted by Possetjohn View Post
Actually as stated in a subsequent post you don't 'get back' 40p per mile, but you are allowed to deduct business mileage at 40p per mile for the 10,000 miles and subsequent miles @ 25p per mile as a business expense. That means you 'get back' 40p x 20% = 8p per mile if you are a basic rate tax payer or 40p x 40% =16p per mile if you are a higher rate taxpayer.

If you calculate the current cost of running a car including all costs over 10,000 miles per year you will find 40p/mile barely covers costs for an ordinary car.

See this link for the AA calculation for a petrol car

http://www.theaa.com/allaboutcars/ad...trol_table.jsp

Or Diesel

http://www.theaa.com/allaboutcars/ad...esel_table.jsp

Of course if you are employed and your employer pays 40p per mile (if you are lucky!!) for business use of your own car the you get the whole 40p/mile tax free!!
Hi there. I have a question can anyone answer. I am a clinician that works for the nhs via a medical company. They pay me 40p a mile which I have been claiming for 2 years, which they pay me happily. Surely I dont drop down to 25p when i it 10,000? My company pays the full 40p, even over this figure. I'd guess I do between 14-15K a year

Last edited by steverothery; 15-03-2009 at 4:26 PM.
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# 16
dzug1
Old 15-03-2009, 4:43 PM
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Quote:
Originally Posted by steverothery View Post
Hi there. I have a question can anyone answer. I am a clinician that works for the nhs via a medical company. They pay me 40p a mile which I have been claiming for 2 years, which they pay me happily. Surely I dont drop down to 25p when i it 10,000? My company pays the full 40p, even over this figure. I'd guess I do between 14-15K a year

They are perfectly fee to continue to pay 40p a mile above 10000.

However if they are doing it correctly they will be deducting tax on the excess as it's no longer a tax free benefit. If they aren't, then you should be including the excess in your tax return.
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# 17
dzug1
Old 15-03-2009, 4:49 PM
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Quote:
Originally Posted by Doh View Post

this rate hasn't changed since about 2001 IIRC i'm sure everyone will agree the costs of motoring has risen considerably since then! its just another way of HMRC cashing in on the sly

An old post, but worth replying.

It probably is 2001 since the rates changed, but if IIRC they went DOWN then, partly because they were well over the odds in the first place , but also partly as a 'green' measure to (mildly) discourage use of vehicles for business use.

So the cost of motoring is only part of the picture.
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# 18
Ste C
Old 15-03-2009, 5:03 PM
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The 40p (and later 25p) per mile does not just cover fuel. It is also for the general running costs and to take into account wear and tear.\

But people still benefit from this. It's not HMRC cashing in!
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# 19
sparrowliz
Old 02-11-2009, 1:54 PM
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I've started a very small business so don't pay tax, but do use my car for my business. I have kept a record of exactly how many miles I am travelling for my business.

Am I able to record 40p/mile, or is that only for taxpayers?
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# 20
John_Pierpoint
Old 03-11-2009, 6:11 PM
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Don't you get a tax free allowance of 20p a mile for riding a push bike?.
I wonder if you can get 20p a mile for one of those wizzy new Chinese electric bikes?
Would letting the posties use theri own bikes go somewhere towards settling the postal dispute?

Last edited by John_Pierpoint; 03-11-2009 at 6:13 PM.
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