Need help re: mileage claim

lovelylaura29

Hammyman wrote: »

That is exactly what you need to do. Work out what it is at HMRC rates (first 10,000 miles at 40p per mile and 25p per mile after) and deduct that amount.



You're not thick at all...not many people even know they can do this.

Just to add that if you travel directly from home to your first appointment, as you don't actually have a set place of work, you can claim the mileage from when you leave your house to the first appointment as well and likewise returning from your last appointment.

how would the tax credit calculation work, when i send in my P60 if i minus the mileage amount from my earnt income. wouldnt that be classed as over paid in their eyes? sorry again just want to get this right first time, you know what the tax people are like.. they dont like to pay anything out if they dont need to..

thanks again laura

Flyboy152

Laura, call the tax credit help line first. I think they may have a different view on what you have been told on here.

lovelylaura29

i did call the tax credit helpline, and they were as confused as me lol

Flyboy152

Although tax credits are handled by HMRC, they are essentially a state benefit. They take into account what your gross pay is, they don't care what deductions are made to it. For example, if you let a property with a mortgage, HMRC, for tax revenue purposes, allows you to deduct the cost of interest from that mortgage (and any other allowable expenses) to set against the rental income, to assess your tax liability. However, when it comes to tax credits, they do not, they use the full rental income to add to your total annual income and do not allow for any expenses.

Hammyman

lovelylaura29 wrote: »

how would the tax credit calculation work, when i send in my P60 if i minus the mileage amount from my earnt income. wouldnt that be classed as over paid in their eyes? sorry again just want to get this right first time, you know what the tax people are like.. they dont like to pay anything out if they dont need to..

thanks again laura

OK...an example:

You earn £10,000 at work. You are not re-imbursed at all for mileage.
You do 1000 miles at 40p per mile which works out at £400. You claim this amount as tax relief via a P87 "Expenses in Employment" form.

Your gross taxable income for the year is income minus tax deductable allowances so:

£10,000 - £4000 = £9600. Your gross income for tax is £9600 and it is the gross income for tax that is the income declared from employment for tax credits or any income related benefits.

Hammyman

Flyboy152 wrote: »

Although tax credits are handled by HMRC, they are essentially a state benefit. They take into account what your gross pay is, they don't care what deductions are made to it. For example, if you let a property with a mortgage, HMRC, for tax revenue purposes, allows you to deduct the cost of interest from that mortgage (and any other allowable expenses) to set against the rental income, to assess your tax liability. However, when it comes to tax credits, they do not, they use the full rental income to add to your total annual income and do not allow for any expenses.

Is completely and utterly wrong. There is not one single part of that post that is correct. I can only assume you've never actually done this and you're going on what you THINK is the way its done or what your mate Bob said down at the Dog and Duck.

If it was, for someone self employed with a wife and 3 kids who had a turnover of £60,000 with expenses of £50,000 they'd be screwed and that family of 5 would be living on £10,000 a year.

Flyboy152

Hammyman wrote: »

Is completely and utterly wrong. There is not one single part of that post that is correct. I can only assume you've never actually done this and you're going on what you THINK is the way its done or what your mate Bob said down at the Dog and Duck.

If it was, for someone self employed with a wife and 3 kids who had a turnover of £60,000 with expenses of £50,000 they'd be screwed and that family of 5 would be living on £10,000 a year.

!!!!!! are you blithering on about. Self-employed income is flip all to do with the context of this discussion. You really do have rod up your end don't you, when it comes to being challenged.

sunshinetours

Flyboy152 wrote: »

!!!!!! are you blithering on about. Self-employed income is flip all to do with the context of this discussion. You really do have rod up your end don't you, when it comes to being challenged.

No offence but if you are going to post authoritive tax advice you may wish to ensure you are at least giving relatively correct advice , otherwise qualify the fact that you presumably are not an accountant

Tax credit calculations are quite clear that you can claim non reimbursed travel expenses

HMRC notes

As far as property income then you are also incorrect. Read through the guidance notes which is probably the easiest place to find this (note 3)

Flyboy152

sunshinetours wrote: »

No offence but if you are going to post authoritive tax advice you may wish to ensure you are at least giving relatively correct advice , otherwise qualify the fact that you presumably are not an accountant

Tax credit calculations are quite clear that you can claim non reimbursed travel expenses

HMRC notes

As far as property income then you are also incorrect. Read through the guidance notes which is probably the easiest place to find this (note 3)

Sunshine, I have to apologise, you are absolutely correct and I shocked in myself for being so naive. I was labouring under false and erroneous advice I had received from HMRC.

When we last renewed our claim for CTCs we were advised that we could not take expenses and deductions from employment and rental property into account, when calculating "other income" on the claim. Having read the guidance notes in your link and having it now confirmed by HMRC, I am really, really peed off. Although I run a business, it doesn't earn a huge profit, but it keeps the wolves from the door, as well keeping over twenty people employed. We have a disabled son and therfore qualify for the additional supplement. There have been times, when we just haven't been able to afford things for him, because the CTCs were cut.

I am also extremely cross with myself. I consider myself to be fairly up to date with these sorts of things and pride myself in making sure I am being advised correctly. I let this go, because I misguidedly trusted this person, who appeared to know what she was doing. She even had the audacity to suggest we might be trouble for claiming these things in the past. :eek: So, you are quite right to admonish me for sprouting what could only be described as nothing more than bullsh t. :mad:

lovelylaura29

thanks for all the replies i have recieved about this, i have read the notes sunshine that you posted link for, am now going to get back on the phone to the tax credit people and get this all sorted.

many thanks again everyone x