Mileage allowance relief question

dellboy102

Hi Guys

I just had a quick question, my employer pays me £350 (£280 after tax) a month in my payslip to use my own car instead of a company car, I then claim back all fuel I use for business miles which is paid separately but I dont get any payments per mile, only the fuel.

Now the question was, when working out how much my employer pays me per mile, do I take into account the fuel?, e.g. £196 worth of fuel , 1218 business miles = average they pay 16p per mile.

Thanks for reading

jennifernil

total your miles for the year, work out the tax free amount at 40p/25p per mile, subtract what they paid you for petrol , and claim the difference as an expense against earnings.

Presumably the petrol money is paid tax free? you dont need to work out how much per mile it equates to, just the totals.

dellboy102

Oh I see, thats a shame, when I was buying a car I calculated it wrong and didnt take into account the fuel they would pay me, my claim for tax relief will be lower now

jennifernil

The £350 does not come into the equation as it has been taxed, it is "cash in lieu of car". But if the fuel money was paid tax free then you have to subtract it from the tax free amount you are allowed to receive, i.e business miles x 40p. You then get tax relief on the difference by entering it on your SA return as expenses against earnings.