Claiming cash back on mileage?

xxtokerxx

Can I claim money back or is it only a tax relief figure?

I thought if i did 1,000 miles I would get £400 back.

However I am now looking at it and looks like it only gets put down as a business expense? - Really?!

That means say i earn't 10k, my normal tax free amount is 7500 means I only pay tax on 2500.

However if I claim the fuel as an expense I can only claim 400 off my tax, so my tax free amount becomes 7900 making my tax amount for the year 2100.

A rough estimate of 30% tax on this figure is 630
A rough estimate of 30% tax on the previous figure is 750

So that means I only save £120 from the fuel?

These are generic figures but is my "thinking" right on this?

Or do I actually get taxed on 2500 (750) and get 400 back?

Please help!

dzug1

Your generic figures really don't make sense but your thinking is right - you don't get £400 back, just the tax on it.

John_Pierpoint

Are you adding tax and National Insurance together to arrive at 30% or are you a pensioner caught in the additional personal allowance trap?

Are you looking forward to April when you personal allowance is expected to rise to 7475 ?

CLAPTON

what's your situation
are you employed or self employed
if employed do you get a mileage allowance

jennifernil

xxtokerxx wrote: »

Can I claim money back or is it only a tax relief figure?

I thought if i did 1,000 miles I would get £400 back.

However I am now looking at it and looks like it only gets put down as a business expense? - Really?!

That means say i earn't 10k, my normal tax free amount is 7500 means I only pay tax on 2500.

However if I claim the fuel as an expense I can only claim 400 off my tax, so my tax free amount becomes 7900 making my tax amount for the year 2100.

A rough estimate of 30% tax on this figure is 630
A rough estimate of 30% tax on the previous figure is 750

So that means I only save £120 from the fuel?

These are generic figures but is my "thinking" right on this?

Or do I actually get taxed on 2500 (750) and get 400 back?

Please help!

Don't make it complicated!

If you are claiming relief on 1000 miles, that is £80 if you are a basic rate taxpayer ((1000 x 40p) x 0.2)

But if you actually get paid anything tax free for your fuel by an employer, you must deduct that first.

xxtokerxx

I am employed, but this is a business on the side.

Therefore I did in theory "1000 miles" so want to know how to get the money back, but I am beginning to realise that it's just tax relief.

The 30% was just a rough addition of the tax i pay and national insurance i pay is roughly 30%

John_Pierpoint

John_Pierpoint wrote: »

Are you adding tax and National Insurance together to arrive at 30% or are you a pensioner caught in the additional personal allowance trap?

Are you looking forward to April when you personal allowance is expected to rise to 7475 ?

So you are making enough profit on the side from your self employment to be liable for tax and class 4 national insurance.

http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073867961

(If you can find enough expenses you might be able to get your profits below the NI liability level ?)

CLAPTON

xxtokerxx wrote: »

I am employed, but this is a business on the side.

Therefore I did in theory "1000 miles" so want to know how to get the money back, but I am beginning to realise that it's just tax relief.

The 30% was just a rough addition of the tax i pay and national insurance i pay is roughly 30%

some actual facts will help if you wish to give them

xxtokerxx

The question is simply does the fuel calculation 40p * X miles work as a deduction on "profit" for a tax relief or is there a monetary figure paid out based on this?

CLAPTON

You can offset the costs of running a business against your income hence reducing profit. The tax payer doesn't pay your business expenses.
For mileage the first 10k miles are assumed to cost 40p per mile so you can offset this cost that against your profits ...as explained above by Jennifernil, you end up with 1000 x 40p = £400 as a business cost which in term reduces your tax by £400 x 20% = £80 (assuming you are a standard rate tax payer