Tax on Fuel Allowance

Giverney

I have recently started a new job and I am to be paid a monthly fuel allowance. I have just found out that my allowance is to be taxed! Forgive me if I'm worng, but I thought I paid tax on fuel already. I have heard that I should be able to claim it back but don't know how, or even if I can. Can anybody advise?

fengirl_2

The tax will be income tax. However, if your employer is paying you not more than 40p pm fir the first 10,000 miles and 25p pm thereafter, he should not be taxing these sums. If he is just paying a round sum allowance which you don't have to account for, then it will be taxed and you can reclaim the tax annually from your tax office at the rates shown above. You will need to keep records of all business miles to enable you to do that.

Giverney

I am just being paid a flat allowance of 25p per mile. As it is only to cover petrol costs from and to my home, it will be the same every month. Many thanks for your very helpful advice.

jennifernil

I don't think you can reclaim the tax on that, travel to/from work is not an allowable expense.

Money_Grabber13579

jennifernil wrote: »

I don't think you can reclaim the tax on that, travel to/from work is not an allowable expense.

Quite right! You will be taxed as essentially your employer is just increasing your salary, not reimbursing expenses.