Car mileage tax!

03022242

..have just started a new job, with pay around 20K

they have me on their Casual milege rate of either:

40p a mile which is NOT taxed..

or 60.5p which i will have to declare to the taxman at the end of the year..

if i am doing around 2500 miles a year which is best for me? i drive a 1.6 petrol!

any help appreiciated!!

fengirl_2

On 60.5p pm you will pay tax of 4p per mile, which effectively means you will receive 56.4p per mile. This must be better than 40p pm, I would have thought.

TM1976

Which ever way you still arne't taxed on the initial 40p so if you get paid more you are always better off taking the higher amount.

Unless there is another element to the deal like a car user allowance then you should definately take the 60.5p.

PasturesNew

With the higher amount you'll get £512/year, fill in one simple tax form (probably just 3-4 boxes and a signature) and lose £100 of that in tax. So £400 earnt just for an hour's work maximum getting, filling in and sending off the form.

No brainer.

TM1976

Actually you shouldn't have to fill out any forms yourself, your employer should declare it on a P11D.

03022242

thanks all

im in local goverment and use my own car if that makes any difference!

03022242

no i dont think i have...i asked the right questions from the right people!!

anyway claim form is to be handed in at end of the month! we shall see!

devils_advocate

jimmo wrote: »

................local government employees ............

Regardless of the tax consequences if you do 2500 business miles a year the 40ppm scheme will cost your employer £1000. The 60.5ppm scheme will cost your employer £1512.50.

It doesn't cost the employer anything. It costs us.

And OP, you also have a liability for NICs on the excess.

dzug1

devils_advocate wrote: »

It doesn't cost the employer anything. It costs us.

Are you really saying local government as an employer has zero costs cos they are funded by the taxpayer? A novel way of looking at it.:D

It costs the employer the mileage rate. It indirectly costs the taxpayer the loss in revenue through the tax relief.

devils_advocate

dzug1 wrote: »

Are you really saying local government as an employer has zero costs cos they are funded by the taxpayer? A novel way of looking at it.:D

It costs the employer the mileage rate. It indirectly costs the taxpayer the loss in revenue through the tax relief.

Probably the opposite of what your implying. local government has no economic revenue, just reimbursement of costs from the council taxpayer and the national taxpayer. So if they wanted to pay £10 per mile to all their employees, they cannot 'go out of business' and employees would not lose their jobs.

If my local council was doing this, I can't take my business elsewhere. That's why we don't have control over local council costs and they simply send us, the taxpayer or the council tax payer, the bill.

wallsy

Take the 60p

I have a car allowance, plus a mileage rate of 12p

At the end of a tax year though I am able to claim back the the difference between 40p and 12p per mile for the first 10000 miles.

I have been doing this now for a few years and got a nice cheque a month later. It was like a saving scheme lol

How ever this year the tax man has changed my tax code to 901. This has concerned me because if i do not do the millage I have done in proviso years I will end up owing more tax. Any advise?

I have also been asked to complete a self assessment even though I do not work for my self. I dont understand. ;o(