Business Mileage - what am I entitled to?

aloevera_3

Hi Everyone,

Thought I'd start this under a new thread - I currenlty use my own car for work and get paid on average 17p per mile. Thanks to this site, I have JUST realised that I can claim Mileage Allowance Relief from Inland revenue ...

So.. I have had a field day, I 've worked out that for tax year 05/06:

Business Mileage: 5356
@ 40p per mile: £2142.40
Company paid me: £910.52
Mileage Allowance Relief: £1231.88

and so far for this year I've done 8672 miles and Mileage allowance relief is appx £1800.00 (ish)

Now, I started to get giddy and thought that these amounts is what the tax man owed me, now I think it's only the tax I would have paid on those amounts @ 22% or 40% (dependent on which year etc...)

Can someone please clarify what I would get and also is this money paid back to me or set against my tax code for future??

All advise greatly appreciated. :j

naturals

It is only relief on the amount so 22% or 40% of the £1231 and £1800.

naturals

Oh, and in the first year you'll get a cheque for the amount. Subsequent years you get your tax code revised assuming you'll do the same mileage. You then tell them whether you've done more or less and they pay you accordingly.

aloevera_3

well, it's better than nothing!!!

thanks

:rolleyes:

ctm_2

naturals wrote:

Oh, and in the first year you'll get a cheque for the amount. Subsequent years you get your tax code revised assuming you'll do the same mileage. You then tell them whether you've done more or less and they pay you accordingly.

If you do get this put into your tax code, and you do less miles in the year than the previous year, then you will likely end up owing extra tax, as you will have received too muchr elief through your code. If you do expect to do less miles in a year, then let HMRC know so that they can adjust your code accordingly.

Alternatively, ask for this relief to not be included in your code, and complete a form P87 at the end of each tax year to claim your relief.

Hoddie_2

Alternatively, ask for this relief to not be included in your code, and complete a form P87 at the end of each tax year to claim your relief.

Not strictly possible as HMRC have a statutory duty to give relief via the code. However, if you blag them and say you don't think you'll have any mileage relief at all, they will remove it.

Hippo

aloevera wrote:

:j

After you sit down here's a few facts for you...

If your car dies less than 24mpg then it's costing you to use your car for business. That excludes the additional insurance premium, servicing and depreciation costs.

If a company pays less than 40p allowance then say no.

jennifernil

I have often thought that the taxpayers are to some extent "subsidising" these stingy companies.

aloevera_3

Hippo wrote:

After you sit down here's a few facts for you...

If your car dies less than 24mpg then it's costing you to use your car for business. That excludes the additional insurance premium, servicing and depreciation costs.

If a company pays less than 40p allowance then say no.

Luckily for me I drive a diesal and get around 50mpg so it's not too bad.

Thanks for all your advise - 05/06 form has now been submitted let's see what happens.

The_Governor

I thought I'd post here rather than start a new thread.

I've been thinking about claiming for company mileage incurred this year, but don't want to get into a muddle with it. I had a read of the tax office guidelines and felt pretty confused afterward, so I thought I'd turn here for straightforward advice/explanation!

I get £260 a month car allowance from my employer, and 13.9 pence per mile.

I've done 3860 miles so far this year.

So, I think that according to what I can gather my calculation shouuld be this:

3860 * .139 = £536.54
260 * 12 = £3120

Making a total of £3656.54

The maximum allowance would be 3860 miles * .4 = £1544 under the maximum allowed payments.

Am I right in thinking I've been "overpaid" by £3656 - £1544 = £2112?

I've paid tax on the lot, but I'm thinking I shouldn't have paid any tax on the £1544 portion of the mileage payments? If I'm right am I entitled to a refund of 40% of £1544 (i.e.£617)?

I'm a 40% tax payer by the way.

Sorry for the long post, I was trying to include all the info. Any help and advice would be gratefully received, I'd rather be a bit clear on my facts before I phone the IR.

Thanks

nearlyrich

I think you only get 40p per mile for the first 10000 miles per year then it drops significantly, it's about 5 years since I ran my own car for business so things may have changed but you could claim tax relief on the business mileage portion of all car related costs when I used to claim.