P87 with Fuel Card

neocaligatio

Afternoon All,

I know this subject has been discussed at length, but it seems everyone's situation is a little different, with mine being no exception!

My employer provides me with a car allowance on a monthly basis along with a fuel card (fully paid for by my employer). I travel extensively with work using my own car and use the fuel card for both business and personal fuel.

I've recently had my tax code adjusted to reflect the full fuel card amount as a benefit in kind and after a phone call with my local tax office they recommend I fill out a p87.

This is where I get confused, as I don't log business miles with my employer, nor do I claim any expenses for mileage. What this means is that I'm paying the tax on my personal mileage AND my business mileage. Does this sounds correct?

On the p87 should I state the amount paid in full for fuel under 'mileage allowance repaid to you'?

I'm really stuck here so hopefully someone will have done this before!

Cheers,

Chris

jennifernil

As you are using your own car, you are entitled to receive 40ppm (reducing to 25ppm after 10000 miles) tax free for your business mileage.

You need to keep a record so you can reclaim the tax. Say you did 10000 business miles and 6000 personal...

You calculate the business miles (40p x 10000) = £4000

Then subtract the cost of the fuel that was paid for you, say 2000litres @ £1.20 per litre = £2400

So you reclaim tax on £1600.

So, yes, you put the full cost of the fuel in.

neocaligatio

So for tax year 2009/10 I did 12,362 business miles and my employer paid for fuel up to the value of £2625. Using those calculations:

12,362 x 0.40 = £4945

£4945 - £2625 = £2320 that I can reclaim tax on?

That doesn't seem right....?

Mikeyorks

It isn't.

The 40p tops out at 10,000 miles ............ you need to use 25p for the residual 2,362?

neocaligatio

So it is as simple as putting the fuel card yearly payment into the 'total mileage allowance payments' box?

jennifernil

Yes, but you need to claim back for the business miles.

I hope you have some records as you MAY be asked to prove how far you drove on business.

TM1976

neocaligatio wrote: »

So it is as simple as putting the fuel card yearly payment into the 'total mileage allowance payments' box?

No you should be taxed through you P11D for the provision of your fuel card.

You can claim tax relief on the full AMAP amounts 40p/25p. You should enter NIL in the amount received on the P87 as you should have been taxed already for the fact that your employer pays all your fuel costs.

jennifernil

Ah, right, sorry, missed the bit where the OP said he was already being taxed on the fuel that was being paid for.

jennifernil

So OP can reclaim tax on .....

10000 x 40p = £4000
plus
2362 x 25p = £590.50

= a useful amount.