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Reclaiming tax on business miles.
Naetha
Posts: 72 Forumite
in Cutting tax
Although I'm reasonably astute with my money, I'm pretty clueless when it comes to tax.
I drive a fair amount of business miles as part of my job, and understand I can claim tax relief on some of this. I currently get paid 13p a mile - I understand I can claim the VAT back on the difference between 40p/m and 13p/m - is this correct?
I have records (in the form of expenses claims and some VAT receipts) that show I drove 4080 miles between Dec 2005 and Jan 2007 for work purposes only. By my own calculations, I also drove the 10 miles round trip to work approximately 240 days last year - can I claim any tax relief on that mileage as it soon adds up!
All help gratefully received!
I drive a fair amount of business miles as part of my job, and understand I can claim tax relief on some of this. I currently get paid 13p a mile - I understand I can claim the VAT back on the difference between 40p/m and 13p/m - is this correct?
I have records (in the form of expenses claims and some VAT receipts) that show I drove 4080 miles between Dec 2005 and Jan 2007 for work purposes only. By my own calculations, I also drove the 10 miles round trip to work approximately 240 days last year - can I claim any tax relief on that mileage as it soon adds up!
All help gratefully received!
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Comments
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Firstly, it isn't VAT you can reclaim, it is income tax.
Secondly, you can't make a claim for "home to work" mileage as this is normal commuting and you can't have any tax relief for that.
So, that leaves us with the difference between what your employer actually pays you and what you are allowed to claim, i.e. 40p minus 13p.
What you do is for each complete tax year, i.e. 6/4 to 5/4, add the legitimate business journey miles you have undertaken (exclude travel to your normal workplace). Multiply that by 40p per mile, which gives you a total figure, then deduct what your employer actually paid you for those miles, which leaves the deficit. You can have tax relief on this deficit, which will be repaid to you by HMRC at your marginal tax rate, i.e. 22% if you are a basic rate taxpayer or 40% if you are a higher rate taxpayer.
The way to get this relief is simply give your tax office a ring - your tax office reference number is on your P60, tell them you want to claim for business mileage, and for which years, and they'll send you a form to complete. There should be no need to complete a full self assessment tax return.0 -
Getting this sorted - should be able to claim about £600 back
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Just sent a basic "how-to" around my office about this, and between 24 of us, there's about £20,000 to claim :eek:0
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