Government Allowance for business miles?

Frugalista

OH has heard that you can claim tax relief for business miles if you use your own car. Can anyone tell me how this works?

He has been offered a job with car allowance & fuel allowance and does around 40,000 miles per year. TIA .

Frugalista

OK - more information.... In his previous job he had a company car and all fuel costs (private & business). The company leased the car at £570 per month.

If he was to take this new job, what would be a comparable car allowance and fuel allowance. They are offering £250pm car and £500pm fuel. Would he be better off asking for the amounts to be reversed or even asking for the whole amount as car allowance and claiming tax relief on the fuel for business miles?? Anyone??

King_Of_Bling

Frugalista wrote: »

OK - more information.... In his previous job he had a company car and all fuel costs (private & business). The company leased the car at £570 per month.

If he was to take this new job, what would be a comparable car allowance and fuel allowance. They are offering £250pm car and £500pm fuel. Would he be better off asking for the amounts to be reversed or even asking for the whole amount as car allowance and claiming tax relief on the fuel for business miles?? Anyone??

don't know, you need to go in the other board Small Biz & Charity Organisers MoneySaving loads of boring accountants there

1984ReturnsForReal_2

depends on the mileage he does a year in his new job.

& also fuel price increase/decrease

But start by finding out the yearly mileage.

Frugalista

1984ReturnsForReal wrote: »

depends on the mileage he does a year in his new job.

& also fuel price increase/decrease

But start by finding out the yearly mileage.

He would be doing around 40,000 miles per year.

1984ReturnsForReal_2

Frugalista wrote: »

He would be doing around 40,000 miles per year.

http://www.hmrc.gov.uk/paye/stepbystep-mileage.htm

Tax free.
40p per mile for 10k
25p thereafter

500 x 12 = £6000 equates to roughly 40,000m @ 34mpg at circa £1.00 per litre (ie fuel payment covers only fuel)

250 x 12 = £3000 received from employer for vehicle

£9000 benefits from employer
£11500 taxable allowance

£2500 balance of taxable allowance at 22% circa £500 tax rebated using allowance.

Basically fuel aside you will be receiving about £290 per month to finance (purchase, insure, tax, MOT & repair) a 40k per year vehicle which will be worth next nothing every 2.5 yrs.

So basically you have £10.5k to buy a car with no miles on it every 36 month.

I cant see you leasing one for it doing 40k.

Unless of course the wage is an additional benefit.

(Hopefully I am right. Not 100% sure.)