Is Car Allowance classed as Car Benefit?

dadio77

Hi All,

I just called the tax office as I have just started receiving a £450 per month car allowance (shown seperate to wages on my wage slip), as well as a small wage increase and bonus, so I wanted to make sure I would be paying the right tax.

The guy told me this was classed as a Car Benefit and my tax code should be changed from 747L to 207L. This sounded to me as a double whammy so I explained that it was introduced as a wage increase (which, as I work for a small company with no car scheme, it was sold to me), and he agreed lo leave my code at 747L.

I obviously understand that I will pay tax and NI (and Student Loan) on the £450 per month, but should this be classed as a Car Benefit? I can now only claim 17p a mile, not 40p as before, so I receive no other benefit other than the £450 minus deductions - surely the tax code change would be further tax paid on top??

Please help!!

CLAPTON

no it's not car benefit; that applies if your company supplies you with a company car and you can use it for your personal use.
in your case the 450 'allowance' is treated just like salary

you can however claim tax allowance on your mileage i.e. the diffeerence between 40 (or is it 45) and 17ppm

dadio77

CLAPTON wrote: »

you can however claim tax allowance on your mileage i.e. the diffeerence between 40 (or is it 45) and 17ppm

Thanks for your quick reply Clapton! Tbh the tax guy didn't seem very sure so I'm glad I asked him to keep my code the same...

I've heard something about claiming tax on fuel before but it's all quite new to me - do I do this via HMRC or my employer??

CLAPTON

dadio77 wrote: »

Thanks for your quick reply Clapton! Tbh the tax guy didn't seem very sure so I'm glad I asked him to keep my code the same...

I've heard something about claiming tax on fuel before but it's all quite new to me - do I do this via HMRC or my employer??

you do it from HMRC after year end when you know your yearly business mileage
the tax allowance was 40ppm for the first 10,000 and then 25ppm
the allowance has now been changed to 45ppm from april 2011 (the 25 is unchanged

jimmo

Generally speaking, employers who pay a car allowance also pay a mileage allowance for business travel albeit significantly less than HMRC rates.
Then you should claim whatever your employer is prepared to pay in mileage first and then claim tax relief on the difference between what your employer pays and the HMRC rates.
Then you will get 100% of what your employer is prepared to pay and 20% or 40% of the balance from HMRC.

Hoddie_2

dadio77 wrote: »

Hi All,

I just called the tax office as I have just started receiving a £450 per month car allowance (shown seperate to wages on my wage slip), as well as a small wage increase and bonus, so I wanted to make sure I would be paying the right tax.

The guy told me this was classed as a Car Benefit and my tax code should be changed from 747L to 207L. This sounded to me as a double whammy so I explained that it was introduced as a wage increase (which, as I work for a small company with no car scheme, it was sold to me), and he agreed lo leave my code at 747L.

I obviously understand that I will pay tax and NI (and Student Loan) on the £450 per month, but should this be classed as a Car Benefit? I can now only claim 17p a mile, not 40p as before, so I receive no other benefit other than the £450 minus deductions - surely the tax code change would be further tax paid on top??

Please help!!

In one post you've demonstrated how poorly trained the HMRC call centre workers are.

Cat1

Hoddie wrote: »

In one post you've demonstrated how poorly trained the HMRC call centre workers are.

Thats quite a sweeping statement. The quality of the information given by the contact centre adviser is dependant on the quality of the question posed. I'm not a contact centre employee but I do deal with taxpayers face to face and it can actually be really hard to work out what they are actually asking. Sounds like the adviser mistook it for a benefit in kind until the caller clarified.

Any

Cat1 wrote: »

Thats quite a sweeping statement. The quality of the information given by the contact centre adviser is dependant on the quality of the question posed. I'm not a contact centre employee but I do deal with taxpayers face to face and it can actually be really hard to work out what they are actually asking. Sounds like the adviser mistook it for a benefit in kind until the caller clarified.

It is true that there was absolutely no need for the call as the tax code is not supposed to change and maybe that is why the advisor got confused-but that is what the call centre is for, to ask the right questions and identify the the correct treatment accordingly. They are not there for folk to tell them how to treat it!

hcb42

The OP explained it very clearly here, perhaps he got a new starter in the call centre:eek:

Hoddie_2

Cat1 wrote: »

Thats quite a sweeping statement. The quality of the information given by the contact centre adviser is dependant on the quality of the question posed. I'm not a contact centre employee but I do deal with taxpayers face to face and it can actually be really hard to work out what they are actually asking. Sounds like the adviser mistook it for a benefit in kind until the caller clarified.

As some may have guessed when I used to post here quite a lot, I used to work in a HMRC call centre. The training is shocking. What used to be tutor-led from experienced staff, is mostly now on-screen rubbish that most don't even read. If something makes no sense you're expected to 'run with it' anyway, even though this stores up problems for the future. The new PAYE computer system introduced a couple of years ago is a good example of this - the headlines last year about PAYE codes being wrong for millions of people was as a result of this new system. I doubt it even works properly now. They learned absolutely nothing from the WTC/CTC scandal.

Not to mention that most P810s, the form used to correct PAYE codes for people with non-earned income and/or expenses but who don't complete tax returns, are usually filed away and forgotten about.

In my time there the over-riding thing impressed upon staff was the need to get people off the phone as quickly as possible. You could have 100% quality (information given accurate, etc) but unless you also had a good CHT (call handling time), you would be subject to additional pressures, managers looking over your shoulder, phone buddies, additional training and monitoring, etc.

If you had rubbish quality but a good a CHT, rarely was any extra support given. The reason? CHTs could be monitored continuously by computers, not just locally but also at head office, and managers had to answer immediately if these slipped and had to provide solutions instantly, even to the point of answering calls themselves. Quality on the other hand can only be monitored by team leaders, and to do so they checked a total of 3 - yes three - calls per week. If these 3 checked out you were deemed to offer 100% quality.

I suppose this is indicative of how it's done in most call centres the world over, but you enter a downward spiral the moment you put CHTs ahead of quality.

Edit to say: believe it or not, I almost always had 100% quality and excellent CHTs. I was often asked to buddy people with higher CHTs but almost always declined unless they were new starters. Part of the reason I left was that the balance of service was biased far too heavily on CHTs and not quality.

hcb42

Yes, a lot measure on CHT, certainly in services like this one. In fact almost all will, as it is one of the key pieces of information in producing a 1/2hr (day by day) staffing requirement forecast. I ran hotel reservation call centres, and I never uttered the acronym CHT (although I had the stats for it). Most decent call centres have other quality measures in place, either mystery shopping or some such scheme.

Of course, the other side to the argument is that a long CHT is not good quality either. (Especially not given the cost of phone calls!) It can often lead to someone who is not as competent in the task or is wandering off the point or not listening to the request. I have listened to thousands of examples of this, where the service given is poor/cringeworthy. That IS a training issue.

The problem is often in management skills - CHT is an indicator, but not a stick to beat people with..(and I know the latter goes on in 90% of call centres in the world!) but to me, a good team manager/team leader ought to be able to coach and develop their team skills to the average result without too much reference to the statistics