Tax Free Allowances

Cybernezz

BoGoF wrote: »

Ok back to basics, say you earn £50,000 and are claiming Mileage Allowance Relief of £5000. All that means is that the £5000 is deducted from your income of £50,000 meaning you are taxed on £45,000 instead of £50,000 so the saving to you in this case is £5000 at 40% = £2000.

I've seen the link and the clue is in the word 'relief' nearly all tax reliefs are given at your marginal rate of tax.

Hey BoGoF,

I'm glad you said that to be honest, because when I first started researching the whole opting out / tax allowance - I suggested here that the HMRC fuel allowance could be factored into your tax code i.e. gross less expenses = taxable amount - and that was questioned by clapton.

If I was opting out theoretically I would be entitled to my regular tax allowance + expenses tax free - then taxed on the remainder.

The timings would be arguable as agreed with the jennifernil. On reading numerous pages on HMRC - my fuel claim would be in excess of £2500 and would need to be submitted on a SA form vs. the P87. (for claims less than 2500).

I understand your point ref how hmrc would not pay the total mileage and I'll continue to read up on it just to be 100%.


I'm really glad with where I've ended up today through the help of yourself and Jennifernil - its really appreciated. :beer:

CLAPTON

Cybernezz wrote: »

Hey BoGoF,



I'm really glad with where I've ended up today through the help of yourself and Jennifernil - its really appreciated. :beer:

and there I was thinking I had been so helpful but there you go

Cybernezz

CLAPTON wrote: »

and there I was thinking I had been so helpful but there you go

You were very helpful Clapton