Another company car tax question!!

22johnny22

I am aware of the tax implications of a company car

I am looking to ask my employers to pay me the approximate value of the lease costs (of the company car) to me

I appreciate i will pay tax on this value etc

my questions are:

1. can I claim from Hmrc a milage allowance for business use?
2. if i can how much can i claim?

I am trying to keep this question simple at this stage

many thanks for your time

Johnny

Gertie_Walker

1. Yes, you can claim tax relief at 40p per mile for the first 10,000 miles and 25p per mile thereafter. This is tax relief at your highest rate - not a reimbursement of those mileage rates.
2. You can claim up to the number of miles you actually travel for business.

22johnny22

thanks Gertie

what does this tax relief actually equate to (i am a higher rate tax payer)

i struggle to get my head around what this means in financial terms

zygurat789

You can claim the 25p and the 40p only if your employer does not pay you any mileage allowance. If you are in receipt of a mieage allowance then you have to reduce the 25p and the 40p by the amount received.
The tax relief on 25p at 40% would be 10p and 16p on 40p.

22johnny22

thanks again

so to clarify if my company give me no payment and I claim the relief as you have stated, how do i actually get the relief? when i submit my tax return would i actually get a rebate or a change in my tax code?

Johnny

TM1976

22johnny22 wrote: »

thanks again

so to clarify if my company give me no payment and I claim the relief as you have stated, how do i actually get the relief? when i submit my tax return would i actually get a rebate or a change in my tax code?

Johnny

Yes. If you complete a tax return you should put it on there. If you aren't within Self Assessment you can complete a P87, if you do this provide a covering letter asking for a cheque otherwise you will probably get a tax code adjustment.

You can't claim either until the tax year is complete.

Gertie_Walker

In your first post you said that your employer would be paying you a travel allowance - this will be taxed at source and so, yes, you can claim tax relief on your busienss miles as, although your employer is paying you, it will be taxed.