Tax relief on business mileage

wonka

Has anyone ever filled in a P87 Tax relief form? I filled one in a month ago, and have just got a letter back from the Inland Revenue asking lots of questions. Just wondered if anyone else had been given the third degree?

Over the past few years I have had to fill in a tax return, but a year ago I was told there was no need to do this any more. However, I use my own car for business mileage, so I still need to get tax relief for this. (My employer supplies me with a fuel card, but doesn't pay any mileage allowance despite the excessive travel that I do).

I explained this a couple of months ago to the Tax man, and they sent me a P87. It's a simple form to fill in - just state the amount of business miles, multiply by 40p per mile, and that's the tax relief.

But now... they want to know the nature of my work, where I operate from, are my duties confined to a geographical area, whether the claim relates to travel from home, and what reimbursement I receive. They also want to see my detailed mileage records, and a copy of my contract of employment!

Gee whizz.... it's gonna take ages to collate all this together... :sad:

grumman

I am going through (roughly)the same thing at the moment. Basicaly the trips you make on business have to be business trips (obvious point I know). In other words there are some journeys you cannot claim as business milage if they are traveling to/from your place of work. This is not as bad as it sounds, it's meant to stop people claiming business mileage who work in the same permanent place of work every day, not (for instance) people who set off from home to different places of work (field engineers, salespeople etc). However, if you go to the same location on the same day each week, or very often (over a period of time!), these places could be classed as your place of work, and therefore you could not claim them as business miles. There are guidelines on what can/cannot be classed as business trips, but I have such a varied day/places I visit, my trip easily (I hope) class as business (I am based at home).
I have been keeping records for a number of years, but only recently has the taxman decided to take a closer look. A collegue of mine had a similar experience a few years ago, with the tax office contacting the places he had visited on his records, to check if he had actualy been there on those days. Keep accurate records.. You never know.

ctm_2

It's normal to be asked for more information and mileage logs etc when you submit a P87 claim.

It's because of the differences between the way any repayment or liability is assessed. If it was in your Self Assessment Tax Return, you are signing a legal document stating that it is correct, and HMRC have various things they can do, i.e enquire into certain aspects of the return, and can demand any over-repayment back and enforce it through the self assessment legislation.

When the claim is dealt with outside of Self Assessment there aren't the same enquiry options, and it's not as easy for them to get back any money repaid from an incorrect claim, so they will often check before accepting a claim, whereas in Self Assessment they can quite happily do the checking after the claim.

Hope that makes sense!

TykeUK

I got asked exactly the same questions which I answered in January. Then last week I was sent one of the simplified 'machine read' self assessment forms which I've just returned. It was asking for basically the same information as before but hopefully it will now trigger the £900 rebate I believe I'm due!

wonka

Thanks Tyke,

I really hope they do ask me to go back to filling in the self-assessment.

That may sound bizarre, but I really found the tax return pretty straight forward, and was usually able to spend an evening filling it in and submitting online.

Since they took me off it a year ago I have spent hours working out PAYE notices, and made countless phone calls trying to sort out the mess they've made.

With a tax return, after working out my interest, Divs, P11 stuff, and pension relief, there were only about 10 boxes that need filling in on the return.

TykeUK

You can ask them to go back onto self assessment - I did and they were happy to do so. The cut-down Short Tax Return is only four sides of A4 so even less daunting than the full one though it seems they will decide if you can have that one or need to use the full form.

wonka

Interesting you say that... I've asked on a couple of occasions if I could go back to the tax return, and was told I couldn't. But I've not had much confidence in the people I've spoken to over the phone. I think it's worth asking again, might even insist and see what they say.

TykeUK

I asked them to do it over the phone while enquiring what was happening about my tax relief. I really did it delay paying tax on investment income for as long as possible by having iot taken out of my tax code. The notice of coding notes said you can ask them to do that if you want to.

They immediately changed my tax code for this tax year and next to remove all the adjustments for higher rate tax and it went through in time for me to get £1000 back in last month's pay

TykeUK

Finally had my business mileage expenses claim accepted in full today. I still owe them money (unfortunately) but much less than it would have been!

wonka

I presume you just got a letter off the Inland revenue then?

So how long did it take them to reply to your P87? I sent mine off a week ago.

nej

Regarding the "travelling to work" bit, I used to be field-based but for the past 18 months or so I've been office based. But, my contract still lists my place of work as my house.

Can I claim the trips to the office every day as business mileage?