help/advice about petrol mileage for work

medical1

I am working as a carer, useing my own car and putting in my own petrol. My company have paid me back in with my pay and have been taxed on it, also only being paid 25p per mile as a new job is this all correct. Should I be taxed on my petrol money?????

xelaine88x

I work as a carer as well, but on my payslip it states -
non-taxable mileage = £
taxable pay =£
So I only get taxed on my actual pay, not on my mileage
You can get a P87 form from HMRC and claim back tax on your mileage at the end of the financial year. You can get up to 40p a mile tax free, which means that you will get the 25p per mile tax free, plus as you are entitled to an extra 15p per mile tax free, they will increase your personal tax allowance to include this.

Example
You do 5000 miles a year at work
You are entitled to 40p per mile tax free and only receive 25p from work, so that leaves 15p per mile tax free
5000 miles x 15p = £750
You are then entitled to £750 per year tax free
Tax code will change from 603L to 678L (based on 2008/09 personal allowances)
So you can earn £6780 a year before you get taxed

Hope that makes sense... it does in my head!

fengirl_2

To add to previous answer, as you are being taxed on the 25p per miles, you would reclaim the whole of the 40 pm. This is only for the first 10,000 miles, after which it is 25p per mile.

medical1

thank you but still dont understand, should they put this in with my pay? e.g earned 500.00 then they added my mileage which is wrong at 75.00 and taxed me on all of it? surely this is not right? many thanks for your support

Mister_E_4

You can have 10,000 miles at 40p tax free, then 25p per mile after that. So you should not be taxed on the 25p per mile you are receiving.
Worth mentioning that to your employer to try and get the tax treatment on the right footing. At the tax year end make a claim for your mileage so you get a tax repayment.
You can also get 40 p per mile NIC free, so if you have paid NIC on mileage as well you can look into getting a repayment on that as well.