Help filling out a P87 form

mrjack

Hi all,

I have a company fuel card for my private car, which I use for both personal and business needs. My total fuel card benefit in kind was £3760 for the last financial year (as declared on P11D form), but I have been told that I can claim back tax on business mileage, which is 2100 miles... which in turn equates to (0.40p x 2100 miles) = £840. This is my tax free amount. So my taxable amount is £2920, correct?

Looking at P87 form, I am confused at what I should put in "Minus total mileage allowance payments received". I don't get paid for the number of miles driven, but rather just get my fuel paid for. So what do I put in this box?

Thanks

TM1976

This is a really unusual claim because most people who get their fuel paid for also have a company car and the way the rules on this are written reflects that. It would be interesting to see what other people on this forum have to say but my opinion is as follows:

The 40/25p per mile rate is for both the petrol and the other costs of your car (which is allowable because you use your own car).

You are taxed already for getting your fuel paid but on a totally different basis.

If you claim the full rate with no reimbursement you should get the correct position on net basis as you say.

I would claim on this basis and write a covering letter explaining what you had done, worst they can do is reject it. Because there are no real rules for this situation I think it is up to you to suggest a way and get agreement. I would say you really should be entitled to something because you use your own car even if the fuel is paid.

mrjack

Thanks TM.

Actually, I was *not* taxed on my fuel benefit in my monthly pay slip (same with medical), so the company submitted a P11D to declare additional "income" as benefit in kind (£4083 in total)

The accountant said that my tax code will be changed in order for me to pay tax on this amount in arrears but said that I can "offset" a little bit of that by claiming business miles. Hence the question

fengirl_2

Yes, you are right. As you are paying tax on the fuel provided by your employer you are in fact not getting any tax relief for the use of your car for work.
Your P87 claim will therefore be 2100 miles @ 40p = £840 on which the tax relief will be @20 or 40%, according to your highest rate of tax. There is no need to enter your employer's contribution on the P87 as this has been taxed.

mrjack

Aha! That makes sense. So, I'll just put £0 in that box.

Many thanks!

TM1976

Actually you were taxed. The P11D is the method HMRC uses to tax you on benefits in kind such as medical and fuel. On an ongoing basis you will pay this through your payslip because they will reduce your tax code and you will pay tax on a higher proportion of your income as a result. It's a bit more complicated than that because P11Ds are only completed once a year so there is a bit of arrears in there to sort out.

Your accountant is saying if you can submit your claims for some allowable expenses the net effect of that benefit in kind will decrease. He's right that it's in your interest to reduce that BIK as it is going to cost you over £800 in tax over the year (or £1,600 if you pay 40% tax).

mrjack

Yeah, that's a lot - almost like taking a pay cut

Not quite sure what tax band I am on - my basic is 35k but with bonuses last year took this up to 37.5k + benefit in kind 4k = 41.5k. Would that push me over to 40% band?

TM1976

You should still be in the 20% band but it's close. You would only pay 40% tax on you earnings over the threshold anyway so it's not likely to be costing you as much as £1,600 though.

John_Pierpoint

mrjack wrote: »

Yeah, that's a lot - almost like taking a pay cut

Not quite sure what tax band I am on - my basic is 35k but with bonuses last year took this up to 37.5k + benefit in kind 4k = 41.5k. Would that push me over to 40% band?

When I was in your position (along with a bunch of dockers at Felixstowe), we would check our position after the January/February payments and bung a slug of money into the pension scheme to avoid going over the 40% threshold.
Date of retirement - date of death decides if this was a good or bad move.:eek:

Pensioners should be aware of their similar 30% threshold not to mention their 40% threshold just like everyone else.