Tax benefits - Help?

Autumnrust

Hi all,

I would really appreciate if anyone could advise on how I can minimise my exposure to the tax man, heres my profile -

Work from home
Car Allowance - £6k a year
Base Salary - £42k a year
Commission (Av) £22k a year
Claim fuel at 16p a mile

My wife is as follows -

Coming to the end of her maternity pay in feb @ £500 PCM
Will then be a stay at home Mum

We are trying to buy a house at the moment so are attempting to maximise our savings

Any advice would be greatly appreciated

Thanks

Caz3121

Have you used the car allowance to get your own car? do you do a lot of business miles?
You are unlikely to qualify for any child related benefits due to your income so the only option may the the tax relief on the business mileage

Autumnrust

Hi,

Yep, I do use my own car, and I currently only get 16p a mile for petrol.

Are you alluding to the P87 form by any chance as I am just looking into it but dont quite get it!?

Thanks

jennifernil

you are allowed 40ppm for the first 10k miles, then 25ppm in 2010/11. 11/12 it is 45ppm then 25ppm.

If you get less than this then you can claim tax relief on the difference.

For example, if you did 10k miles you are allowed £4000 tax free. You get only £1600 from your employer, so you can claim relief on 4000-1600= £2400.

At 40% tax that is £960 off your tax.

There is not a lot you can do with your wife's tax allowance, other than keep all savings in her name in the best account you can find as she can register for gross interest soon.

She may also, depending on income, be able to claim some tax back on interest in the current tax year.