Petrol Card and P87

withabix

TM1976 wrote: »

Use the 12p a mile as this is what your employer uses to value the the fuel purchased.

INCORRECT.

You have to use the value that HMRC uses to value the total fuel purchased using your fuel card, which will be the figure that your employer enters on your P11D, which will equal all the fuel you purchased. From this they will deduct the value of (private miles x 12p) to partially cancel out your private fuel cost. That figure is shown in a different box on the P11D.

A fuel card provided by your employer for any vehicle not provided by them is automatically a BIK (and will result in a P11D value), against which you reclaim tax relief on the business miles travelled.

You need to wait for a P11D and probably complete a Self Assessment form.

Your mileage level of 35000 will probably be too high for the value limit on a P87 (= Relief on £2500) anyway.

Jump the gun, use the P87 and enter figures which do not match your P11D and you will get a tax bill later in the summer.

You will get a P11D in June. Providing you request a Self Assessment form in advance and register for your HMRC username and password (sent by post - so do it now!!) and submit online, you will get your money typically within a week of submitting.

Use the P87 if you must, but as soon as HMRC receive your P11D with BIK values (= all of the fuel purhased and anything else you get like BUPA etc), they will send you a Self Assessment form anyway whether you submit a P87 or not, because that P11D will indicate that you haven't paid enough tax.

withabix

croftyjnr wrote: »

As i said earlier i didnt "receive" anything, as all business mileage is paid up front on petrol card. So do i need to put a figure in this box??

Finally the P87, Specifically states to not send any further paperwork, so why do i need the P11d?

You received the value of the fuel you purchased using the fuel card.

You don't need to send the P11D - your employer will send that to HMRC, because they have to when you receive anything of monetary value from your employer other than what appears on your PAYE P60. You will be sent a copy of both by the end of June.

TM1976

"It is ALL a taxable BIK until you claim tax relief on the actual business mileage."

Sorry this is wrong, the employer has paid no private fuel, this has been recharged to the OP.

A fuel card is just a payment mechanism like a credit card.

The OP charges all his fuel to the card, but his employer recharges the private fuel to back to the OP. The company pays no private fuel so there is no BIK.

"Your mileage level of 35000 will probably be too high for the value limit on a P87 (= Relief on £2500) anyway."

This is true but HMR&C frequently don't enforce this limit so I would recommend you submit the P87 rather than go into self assesment as this is more onerous, plus once a P87 claim has been agreed HMR&C cannot revisit it where as they can investigate an SA claim at a later date.

TM1976

withabix - I understand what you are saying but the OP needs to avoid taking the position that he is making a contribution for his private mileage as this will result in him paying more tax when he is in effect paying for all his private mileage.

withabix

TM1976 wrote: »

"It is ALL a taxable BIK until you claim tax relief on the actual business mileage."

Sorry this is wrong, the employer has paid no private fuel, this has been recharged to the OP.

A fuel card is just a payment mechanism like a credit card.

The OP charges all his fuel to the card, but his employer recharges the private fuel to back to the OP. The company pays no private fuel so there is no BIK.

"Your mileage level of 35000 will probably be too high for the value limit on a P87 (= Relief on £2500) anyway."

This is true but HMR&C frequently don't enforce this limit so I would recommend you submit the P87 rather than go into self assesment as this is more onerous, plus once a P87 claim has been agreed HMR&C cannot revisit it where as they can investigate an SA claim at a later date.

You can argue this position all day, but, like I said, HMRC do not have a crystal ball.

Fuel purchases for an employee's own car are treated as a taxable BIK at the rate of 100% of the expenditure until the employee claims relief against that expenditure, irrespective of reimbursement to the employer for private fuel.

The employer WILL enter the value of 100% of the fuel purchased using the fuel card onto the P11D.

HMRC WILL take this figure as being subject to tax and NI, against which the employee has to claim relief on his mileage expense at the 40p/25p rates.

The 12p/mile contribution the OP has made will be taken off the total fuel purchased, like it or not. Unless the OP manages to drive at 12p/mile, he hasn't reimbursed his employer for all of his private mileage. He has paid 12p towards each private mile driven.

If he wants to submit a P87, all well and good, but he needs to wait for the P11D and use the same figures.

HMRC can and will revisit an 'agreed' P87 if you have entered figures on it which are different to the information on the P11D.

withabix

TM1976 wrote: »

withabix - I understand what you are saying but the OP needs to avoid taking the position that he is making a contribution for his private mileage as this will result in him paying more tax when he is in effect paying for all his private mileage.

He isn't taking that position, the P11D will do that for him.

The employer isn't taking 12p/mile of the employee to save the employee some tax, they are doing it to save themselves money.

HMRC work in ££££ and not miles. The miles are just part of a calculation for an expense based on business miles only. There is no calculation for private miles as far as HMRC are concerned - it's all ££££.

TM1976

withabix wrote: »

He isn't taking that position, the P11D will do that for him.

I don't believe there will be a P11D because the employer doesn't pay private miles. You don't declare a BIK because a card exists, you do so because you pay private fuel.

withabix wrote: »

The employer isn't taking 12p/mile of the employee to save the employee some tax, they are doing it to save themselves money.

We can all only speculate on the employer's motives but I suspect that the employer gives a fuel card because they don't expect the employee to sub them for £400 of petrol every month in the same way that an employer gives a corporate credit card so they don't have to pay their own expenses.

withabix wrote: »

HMRC work in ££££ and not miles. The miles are just part of a calculation for an expense based on business miles only. There is no calculation for private miles as far as HMRC are concerned - it's all ££££.

The employer is putting a ££££ value on this. Every company and HMR&C themselves use a per mile rate because they can't accurately apportion the real cost. You don't have to use the HMR&C rate but I do agree that the fuel rate used does have to be representative of the real MPG/fuel cost.

Either way the method of getting to the business/private mileage split will be the same - record the business mileage and subtract it from the total mileage.

TM1976

withabix wrote: »

To work out what you are due back as tax relief, assuming fuel is your only BIK:

A) Total fuel purchased = £
First 10,000 business miles = £(10,000 x 0.40)
C) Remainder of business miles = £(remainder x 0.25)
D) Contribution for private miles = £(private miles x 0.12)

Your Business Expense is B+C

Your Benefit in Kind is A, less the contribution D

So, you are due tax relief on £(B + C - A - D)

.

In any event if the fuel reimbursement is classed as a contribution then this is incorrect as the fuel BIK can't be reduced by a contribution towards the fuel cost the employee must pay tax on the whole amount of fuel. The BIK would then be A, but the OP could then claim tax relief at the full 40p/25p per mile and forget the reimbursement.

Such a benefit in kind reduction can only be made in the case of a capital contribution towards a company car.

Heathy65

Where abouts in the SA Return do I enter the information from my P87 (in fact what information do I need to enter in my SA to claim that way rather than submitting a P87 too)?

Many thanks