Car Allowance and claiming tax back

w3lsh_boy1

HI all, hope you can help.

I have been receing a car allowance instead of a company car, out of choice.

Basically i get 4000 a year as the allowance. I use a petrol card to pay for all my petrol, which work pay for and i then just recored my private mileage and pay 12p a mile back to the company.

I have been told i can claim tax back for every business mile that I have done? I have done a search on the net but cant really find much info on the situation and how much i would be able to claim back.

Any help would be appreciated guys

Thanks

sarahlouise210

You cannot claim a tax refund on the business mileage as the business mileage is not costing you anything - it is paid for with the fuel card. You cannot claim tax relief on the 12p a mile you are paying as that is for private mileage and no relief is available for private mileage! I think you have received dodgy info !

nej

I have heard that the petrol can work this way:

The company pays for the petrol, which is the same as you receiving 13p/mile or thereabouts, and then you can claim tax relief on the difference between that and 30p/mile. There are a few threads on it somwhere in this forum.

I don't know if this is entirely accurate or not, though, and obviously is only for business mileage. I would be a bit surprised if it is correct, as you aren't paying for the fuel in the 1st place.

cash99

You can claim 40p per mile for the first 10000 miles and 25p after that. From this you need to deduct the cost of the business fuel provided by your employer.

It doesn't matter that you employer gives you a car allowance, as this is already taxed with your salary.

w3lsh_boy1

Thanks cash.

so do i claim tax relief or tax back?

ie 10k @ 40p a mile = £4000

so i claim 4k back or tax relief on the 4k

Dave_the_Ginger_Cat

I think you can claim tax relief on the difference between what the company pays you i.e. actual cost and the 40p/25p per mile. I have found the revenue to be very helpful on this. They are unlikley to make notes of general queries on your file, and if this makes you feel uncomfortable, tell them you are thinking of joining a company who has this scheme, and can they offer you advice.

sarahlouise210

cash99 wrote:

You can claim 40p per mile for the first 10000 miles and 25p after that. From this you need to deduct the cost of the business fuel provided by your employer.

It doesn't matter that you employer gives you a car allowance, as this is already taxed with your salary.

This is not correct. The car allowance is received instead of a company car and taxed through the wages just as a company car would be...via a deduction in the tax code. If you had a company car you know you could not claim a mileage allowance as well - it is the same thing.
Regarding the fuel payment the op makes - if all private mileage is paid for then no fuel deduction should be in your tax code. The business mileage is paid for by the companies fuel card - you cannot claim any tax releif on something that has not cost you anything. Mileage allowances are for those who use their own car for work-the mileage allowance covers all expenses involved including fuel. It does not apply in this case.

cash99

sarahlouise210 wrote:

This is not correct. The car allowance is received instead of a company car and taxed through the wages just as a company car would be...via a deduction in the tax code. If you had a company car you know you could not claim a mileage allowance as well - it is the same thing.

This is totally wrong, it is not the same thing at all.

If you have a company car then ignoring fuel for the moment, the company pays for all business and private useage costs. The employee is taxed through a benefit in kind on the private use element only. In this case the employee has not paid any of the costs of using the car for business, the company pays them all.

If an employee receives a car allowance then this is merely an element of pay and is taxed accordingly. When an employee then takes a business trip in their own car they are paying for the costs from their own taxed income. They are entitled to a deduction from their income for the cost of business travel as this is an expense wholly, necessarily and exclusively incurred in the performance of their duties.

In the OPs case the fuel is taken care of by his employer meaning he can claim for all the other costs in using his car. The only method of claiming the costs is through the HMRC approved milege rates 0f 40p for the first 10,000 miles and 25p thereafter. Therefore the OP can claim a tax deducction of (40-12) 28p for the first 10,000 miles and (25-12) 13p per mile beyond that.

If the OP had a company car then the only amount he could claim for business trips, without incurring a tax liability would be for the fuel costs, at HMRC approved rates, which range from 9-13p depending on the fuel and engine size.

rikwaller

Sorry to Thread Hijack, can somebody check the following to see if I have understood correctly ?

I have a PCP car that is registered in my name, however my employer pays the monthly payment on it and I make a contribution to this payment.

All business miles that i do, I then claim back the relevent mileage rate per mile as set down by my company.

In the last tax year, I have completed approx 6000 business miles.

Does this mean I can claim for the difference between the 40p per mile as set down by the tax office and the rate I have received (approx 10p) so 30p a mile.

6000 * 0.30p = 1800 @22% = £396

How would I go about doing this and what proof would I need to send (i.e receipts ? )

Once again sorry about the hi-jack and thanks for the help

Simon

cash99

Assuming the arrangement you have with your employer and the lease company does not constitute the provision of a company car then you can claim the amount you posted.

You do not need receipts, but you do need a record of your trips. If you submit expense claims to claim you mileage costs then copies of these should be sufficient.

Give your tax office a ring about reclaiming.

w3lsh_boy1

i dont lease the car, i own it outright.

any idea when i should be submitting?