Motor mileage

gpc273

Hi,

My question is about motor mileage tax, my company currently pay 40p per mile when using my own car on business trips. In April, I believe, the rate you can claim from HMRC went upto 45p. My company have decided not to pay at the new rate and told us to claim.
Would it be better to wait until the end of the current tax year or put claims in willy-nilly so to speak?

real1314

You can't claim it until the end of the tax year.

In the past I've claimed just based on a letter that states the number of business miles I was paid for, the mileage rate and the total paid.

I've then stated the corresponding amount based on the HMRC rate; and then the tax refund due.

The easier you make it for them, the quicker it should get done. :cool:

rs65

You'll be claiming tax relief on the difference between what you receive and 45p.

I think its normal to use a P87 form after the end of the tax year. However, they may adjust your tax code now based on the mileage you anticipate for the current tax year. I did mine over the phone.

gpc273

Thank you, I'll wait till next April. I thought I would just get the extra 5p per mile I'm claiming, is that not the same as tax relief on the difference?

jennifernil

No, if the difference is 5ppm, and you are on 20% tax, you will get 1p per mile off your tax bill.

You are allowed to receive 45ppm tax free, so if you only get 40ppm you can effectively set the 5ppm against some other income and pay no tax on that income.

If you pay 40% tax you will get 2ppm tax relief.

You cannot expect the rest of the taxpayers to make up the mileage your employer doesn't pay you!

Do you do a high mileage? Only the first 10k miles is allowed at 45ppm, the rest is at 25ppm so if you do a high mileage and get 40ppm on it all, you could end up having to pay more tax.

gpc273

Aah, makes sense. No I won't go over the10k.