AMR and company car allowance

pufferfish_2

Hi all,

Before June 2008, I was using my own vehicle for company business and was receiving the HMRC Approved Mileage Rate (AMR) for my business mileage from my employer (@40p/mile <10k miles and 25p >10k miles).

Since June, I've been given the option of a company car or cash allowance. I've decided to take the cash allowance which I obviously then pay income tax on. However, my employer now only pays me 20p/mile.

My questions are:
i) Can I claim back the difference between the AMR and what my employer is paying me even if I'm getting a cash allowance. (i.e. 40-20p =20p reclaimed)
ii) If so, how do I go about this - complete a P87?
iii) If the answer to (i) is yes, is there any specific reference to this on the HMRC site? I've looked through pages of info but am none the wiser.

I did try calling my tax office but in true HMRC style, they didn't have a clue and couldn't give me a definite answer! First the advice was to complete a P87 and see if it was approved. When I explained that I didn't have any desire to spend time completing a form which might be rejected, the advice was then to put it in writing as it had to be dealt with by a 'separate department'.

Any advice from members here much appreciated.

Pufferfish.

CLAPTON

You can claim tax relief on the diffference between the HMRC limits and what you receive: in your case you can claim tax relief of 20p per mile for the first 10,000 miles and then tax relief on 5p thereafter
(note that's tax relief and not the actual amount)

and yes you can complete a P87 at the end of the relevant tax year

http://www.hmrc.gov.uk/forms/p87.pdf