Company Car Allowance

Jammydodger_2

Hello, posted the following in the TAX thread, but was told I might get a better response from here, so here goes

I have recently opted out of my company car scheme, and moved to a car allowance. What I am trying to figure out is how the AMAP's tax system works.

Basically this is the situation...

I get paid my Car Allowance on top of my salary (450pm), and it is taxed at 22% ( My tax rate) I then get 25p per mile for all miles done for work.

I have gone all over the internet looking for this, and it is a complete mine field. I am thinking I will just put in a P87 to the tax office, but any help would be accepted greatfully.

This is as far as I have got so far. I do 30000 miles a year so according to the MAR rates I get

10000 x 40p = 4000
20000 x 25p = 5000
so total = 9000

Company pays 25p per mile

30000 x 25p = 7500

so I should be able to reclaim tax of 1500 pounds ( ie increase my tax code by 150) Am I right or miles off the mark?

NewbieMoneySaver**

This looks good to me.

I have also been looking everywhere for the information on this and did come across some good info on here last week.

Basically the poster had contacted hmrc to ask if they were eligible to claim and they were told to put a p87 in and they will decide when they see the info.

On that info I went ahead and did just that and am now awaiting an answer.

On what you have got above. I also worked it out just like that and that's the way the form does it. It's easy.

Hope we have luck.

mrkbrrws

You are right in the calculation, but you would get back the tax on £1,500, i.e £300 as you pay basic rate.

Tiggergirl

You won't be able to reclaim tax OF £1500, but tax ON £1500, ie 20% of £1500 is £300.

Your tax rate won't be 22% as that is the basic rate for last year. the basic rate is currently 20%.