Business Milage? Claiming it back?

edda

imcognito wrote: »

Hi I saw apost about this on another board so thought I would check over here for clarification..

My Husband does a lot of business miles which his company pay him a measly 20p a mile for.. However he does get about £100 a month which works out to 500 miles a month ish.
Thanks
Im x

What is the £100 a month for? If this doesn't directly cover expenses incurred, it could be taxable.

Or is it a 'float' that is called upon to cover expenses and is only topped up as needed?

I'd check this out first - your OH doesn't want to end up paying more tax.

WestonDave

RayWolfe - if the employer paid 40p per mile instead of 20p per mile, he would get tax releif against his profits for the additional 20p. Now we don't know the status of the employer here so we can't be sure what rate of tax they are paying - if they are a small company it could be just 10% but if its a rich partnership it could be 40%.

OK so here's the maths bit. If Imcognito's OH claims tax releif, he will get back 4p per mile from HMRC and still be sad that he doesn't get the other 16p. The employer is 20p better off but pays tax on that extra profit which could be anything from 2p to 8p per mile.

On average therefore the employer pays say 4p extra tax, and the employee claims back 4p tax releif so no loss to the Revenue. In other words we taxpayers are neutral in this situation - the employer is not giving the employee as much as they could, but we don't know what business reasons factor into that.

imcognito

edda wrote: »

What is the £100 a month for? If this doesn't directly cover expenses incurred, it could be taxable.

Or is it a 'float' that is called upon to cover expenses and is only topped up as needed?

I'd check this out first - your OH doesn't want to end up paying more tax.

Hi The £100 (ish) is 20p per mile for each business mile he does... he claims back however many miles he does.. roughly 500 miles a month from looking at the last few months expenses he has received...

It probably does cover his petrol for these journeys but not up to the govt allowance.

imcognito

WestonDave wrote: »

RayWolfe - if the employer paid 40p per mile instead of 20p per mile, he would get tax releif against his profits for the additional 20p. Now we don't know the status of the employer here so we can't be sure what rate of tax they are paying - if they are a small company it could be just 10% but if its a rich partnership it could be 40%.

OK so here's the maths bit. If Imcognito's OH claims tax releif, he will get back 4p per mile from HMRC and still be sad that he doesn't get the other 16p. The employer is 20p better off but pays tax on that extra profit which could be anything from 2p to 8p per mile.

On average therefore the employer pays say 4p extra tax, and the employee claims back 4p tax releif so no loss to the Revenue. In other words we taxpayers are neutral in this situation - the employer is not giving the employee as much as they could, but we don't know what business reasons factor into that.

The employer is a HUGE one prob one of the biggest in the country... I think every single one of us pays them each month!!

The employer therefore needs all these extra pennies from the milage claims as they obvioulsy need to pay these celebrities far more LOL!!

So now we all know you are all in fact paying my hubbies wages LOL!!

But hey ho if we can claim back 4p a mile ont he tax relief Id say it is better than nothing.

You know what makes it worse??? They are also asking for Petrol receipts... the employer that is.. Now tell me why would they need petrol receipts when he is claiming back milage?? It makes no sense to me because surely when he buys petrol has no reflection on when he is actually doing milage for them and they kick up a fuss when he has 5 trips in a week and not 5 receipts to "back it up"

Just want to say thanks for your help and explaining it a bit.. least we know we get something back at least.

CluelessJock

Given increased insurance costs for business use (you do have it don't you), wear and tear etc, I think I would be stopping using my car at 20p per mile. Even with the additional tax allowance it is likely you are actually subsidisng the employer.

markanders7353

imcognito wrote: »

What if I am paid more or less than the tax-free amount?

If you are paid more than the tax-free amount, the excess is taxable as income. Your employer is responsible for advising HMRC of the amount and tax is normally collected via your PAYE tax code. If you receive a tax return, you are responsible for including the same amount on the return.
If you are paid less than the tax-free amount, you are entitled to Mileage Allowance Relief for the amount by which the payments you received fall short. For example, if the maximum is 40p per mile for work journeys in your car and your employer only pays you 36p per mile, you are entitled to additional tax relief of 4p per mile. You can advise HMRC of this by letter, or you can use a form available for the purpose (PDF 97K)

You can claim the tax relief on the difference between the business mileage rate your employer gives you and the HMRC allowed rate on your self assessment tax return. If you are a 40% tax payer, you will be automatically sent a tax return to fill in. If you are not a 40% tax payer, you can ask them to send you one anyway and fill in a self-assessment tax return. It's quite easy if you're financial affairs are simple, which most people's are, and you can do it online. HMRC does the calculations for you and I have always received my refund cheque within about 3 to 4 weeks of submitting my annual return.

The tax return has a section for working out the mileage rate differences for you. Just make sure you keep 6 years worth of accurate records of the mileage you did and the rate and total amount you received.

Hope that helps.

lisyloo

RayWolfe wrote: »

I find it incredible that I, with other tax payers, find ourselves subsidising an employer who is not paying his employees the full cost of expenses wholly and necessarily incurred in the conduct of employment!

So do I.
Why do people do this?
Why don't you refuse?
Unless it's in your contract, no-one can force you to use your own car.
Why not ask for a taxi or hire car if pubic transport is not available?

Perhaps someone more knolegeble than I can enlighten me on the reason for this?

Either they are simply not assertive enough to say no or come up with other suggestions (as above).
Or people have put themselves in a situation where there back is against the wall financially and career wise and they are terrified of losing their job.

Personally I would expect an employer to re-imburse me fully for the costs involved and would not put myself i a posistion where I was unable to enter reasonable negotiations.

imcognito

lisyloo wrote: »

So do I.
Why do people do this?
Why don't you refuse?
Unless it's in your contract, no-one can force you to use your own car.
Why not ask for a taxi or hire car if pubic transport is not available?



Either they are simply not assertive enough to say no or come up with other suggestions (as above).
Or people have put themselves in a situation where there back is against the wall financially and career wise and they are terrified of losing their job.

Personally I would expect an employer to re-imburse me fully for the costs involved and would not put myself i a posistion where I was unable to enter reasonable negotiations.

Hi ...

I doubt they would pay for a taxi. We live 30 miles from his office, he gets a call in the middle of the night to go fix somehting there is certainly no public transport, he needs to get there asap to fix the problem. He is getting paid ontop of his salary to do the work anyway and the milage is on top of that. A taxt to take him there either sit around till he has finished or get another one in middle of night to take him home?? No good for him really as soon as he done the work he wants to get back to his bed!

I dont think a hire car would work out either as he may not get a call so they would be hiring a car for a week for him to maybe not get called in?? (they do prefer that employess use hire cars if doing a lot of travelling though in daytime for that) Ok thats their loss but I think they would refuse the cost of a hire car for his night work!...

I will check his contract though..

spoonfedspencer

Great bit of info - thanks.

lisyloo

imcognito wrote: »

I doubt they would pay for a taxi.

As you point out, sometimes it's very convenient to use your own transport.
However he should be properly compensated for that.
Personally I get 40p per mile which I find makes a profit, but I expect to at least break even.
If not then there needs to be some negotiation.
It's not unreasonable at all to expect this to be covered.