Just claimed back over 6 1/2 grand from HMRC in taxed mileage expenses

Sulli

Fair play, well done!!

I have often wondered about whether it is worth doing this. For the past 4 years I have been doing around 5-6000 miles per year business mileage. For this I am paid 30p per mile and I get an essential car user allowance paid monthly of £200.

I wondered whether I can claim the 10p per mile (difference between the 30p I get and the 40p Inland Revenue rate) which would work out at around £500 per year. Or does the fact I get essential car user allowance paid on top of my salary preclude this?

Lum

You can claim back tax relief on the missing 10p a mile, so that works out as 3p a mile. (assuming you're a 20% taxpayer) Note that the rate is now 45p a mile, not 40p.

As for your car allowance, it depends on whether that's done as taxable wages or not. If it's not taxed then it will count as part of your total mileage payments and the numbers get more complicated.

sunshinetours

Well done Lum but slightly misleading in that a monthly car allowance will always generally be seen as remuneration and therefore taxed under PAYE

If fuel card is proved that it was only for business fuel should not be a P11D benefit

You have effectively gone the route of proving that you should be paid a different rate of travel allowance and have got the tax relief back on that element

An exercise for you well worth doing at 40000 miles a year!

Lum

Interesting. I spent the whole time under the impression that I could claim car allowance as part of my mileage payments. My calculations were based on this and HMRC accepted them and paid up.

Perhaps it was because my employer regularly screwed up my car allowance, sometimes not paying it, sometimes paying double, that it was seen as a variable payment? There were a couple of months where I didn't actually use my car and they didn't pay me car allowance at all, which was annoying given that I was still paying out on the car loan and insurance.

jaydeeuk1

Nice one, Lum. This thread has got me thinking now....

May I hijack this thread?

Work for a small company, and over last 2/3 years, whenever I've gone out on business I've had to use my own car. Might be once a month, perhaps 300 mile round trip. Employer has only paid me petrol money, nothing else (although I would also include food, usually £5- £10).
Its my own car, an IQ3, and I've been meaning to claim back but have never got round to it.

Now I have no receipts, or records of mileage, but I could get these from the book keeper assuming she has them, and work out some dates from emails of arranged meetings. Most times I've had to give receipts to my boss, so assume they've passed them on.

I could work out mileage from route planner of journeys that day, would that be sufficient to claim back? I earn about £20k before tax

£40 gets me near 300 miles (an average journey), and then say £10 food.

300*0.45 = £135.

So does this mean I can claim £135 - £50 receipts = £75 back, or is it 40% of £135? Really not sure!

Also, is there anything else I can claim for? The car I have is on lease, £10k a year, about 2500 is due to business travel. Employer won't give car allowance, let alone a payrise (been 4 years now since last one.) so any suggestions on claiming back will be greatly appreciated.

Lum

Payments for food do not count as mileage payments, they are "subsistence" and are normally reimbursed in full by the employer with no tax implications.

The recommended way of recording mileage is to use the trip counter on your car. I always recommend this over using route planners or GPS as it will give a slightly higher number (5% on most cars) but really any form of written mileage log will do the job. If HMRC ask for further evidence then send them a copy of your planner with the relevant trips highlighted.

So using your figures, assuming you do less than 10,000 miles per year and are in the 20% tax band

300 miles @ 45p per mile = £145 tax-free allowance
Payment by employer for trip = £40
Shortfall in payment = £145 - £40 = £105
Tax relief claimable = £105 x 20% = £21

What I would do in your situation is get a credit card purely for business expenses, be sure to pay everything on this card and pay it in full each month, this has several advantages

1) It gives you a handy monthly summary of what you have spent
2) If your employer is late paying back your expenses and you incur interest charges, you can claim these as expenses and having no non-business related charges on there means it's very difficult to argue against paying the full amount.
2a) As a bonus: after doing this once, if it's a small employer, they tend to not mess you around a second time.

Hammyman

HMRC will accept mileage claims based on route caculators such as AA Routeplanner, Google Maps. You will need to complete a P87, Expenses in Employment which you can download from HMRC website and send to the tax office your company uses - find it out from the PAYE tax reference. The amount you claim is based (up to the current tax year) on 40p per mile for the first 10,000 miles then 25p per mile after. Calculate that amount then deduct any amount your employer has reimbursed you and the total is the one you put in the box for the amount claimed.

ALSO: If you claim tax credits, it is a tax deductible expense so your actual income for tax credits would be your gross income less the amount on the P87 i.e:

Gross PAYE for 2010-2011 - £20,000
Amount claimed on P87 - £2000

Gross income for 2010-2011 for tax credits = £18,000.

Lum

P87! That's the bloody form I needed all these years, thank you.

jaydeeuk1

Cheers Lum & Hammy.


So on a 300 mile trip, it works out at £21 I get back?
How do they prove you'd done the mileage you claim? Eg, I can show AA route planner to be 300 miles, but how do I prove I've actually done those 300 miles? In some cases, I may not have an email confirmation of a meeting, for example a last minute phone call. Does HMRC demand evidence of the journey being taken?

Edit - one other thing, how far can I claim back? I've been using either my current car or previous car for 4 or 5 years, do I need to fill a p87 for each year I claim (and I presume from April to April)

cheers!

Lum

They don't really check, and when they do, a logbook of some sort is fine.