Another Business Mileage Question!

dbrookf

I am home based and can claim first 4000 miles each tax year at 45p per mile when I travel to head office (25p over 4k); I am now about to reach my 4k limit.

My question is: as the HMRC suggests 10k at 45p per mile per tax year, is there anything else I can do other than just start claiming 25p per mile from my company from now on?

Appreciate any guidance!

guesswho2000

Not at this stage, it is up to your employer what they actually pay, the 45p is an HMRC tax free limit (AMAP), they could pay you £1 per mile, but you'd be taxed on 55p of that.

What you can do, however, is claim tax relief on the amount between what you are paid and the limit:

Example:
You are paid - 4000 miles at 45p
- 7000 miles at 25p

The tax free limit is 10000 at 45p, then 25p, so the maximum allowance would be £4,750 tax free, however you've only been paid £3,550, therefore you can claim tax relief on the £1200 difference (the actual amount you'd gain is based on the rate of tax you currently pay, 20%, 40% or 50%)

I would imagine you'd get it automatically, mine is calculated automatically by my employer in the P11(D) annually, and the tax code adjusted accordingly (so you never actually see the benefit as a payment, you just pay less tax).

chalkie99

I would suggest that you may be entitled to claim zero on the first 4k miles (you are already receiving the maximum 45p from your employers), then 20p per mile for the next 6k, (the difference between the 45p you are entitled to and the 25p paid by your employers) and then 25p for any mileage over the first 10k.

dbrookf

chalkie99 wrote: »

I would suggest that you may be entitled to claim zero on the first 4k miles (you are already receiving the maximum 45p from your employers), then 20p per mile for the next 6k, (the difference between the 45p you are entitled to and the 25p paid by your employers) and then 25p for any mileage over the first 10k.

Would you agree GuessWho2000????

GRM

chalkie99 wrote: »

and then 25p for any mileage over the first 10k.

HMRC allows 25p/mile over 10k and his employer pays 25p/mile - I don't see how he can claim for anything over 10k.

As guesswho pointed out the OP can claim tax relief on up to 6000 miles x 20p.

chalkie99

Yes, sorry! Confused myself by thinking the employer had a 10k limit when no such thing was mentioned. So, yes, any mileage over 10k reverts back to zero from HMRC as they are getting the full 25p from the employer.

dbrookf

Sorry to sound stupid, but how do I go about claiming tax relief (never done it before).

Am a contractor working for an umbrella company; have been used to working as an employee for a company who dealt with any tax affairs!

jennifernil

http://www.hmrc.gov.uk/forms/p87.pdf

P87 for up to £2500, but sounds like you would be over this.

In that case you will need to file a self assessment after the end of the tax year in question.