Car allowance

robinspain

Hi,
i am due to start a new job, and i have been offered a car allowance of 4500 pounds per year
I will then buy the car in my name and maintain it as well.
I expect to cover about 30k miles per year.

My question is, what should i expect my employer to pay me for my business mileage, I see figures on the HMRC website of 11p for a company car, up to 45p for a privately owned car, like mine. want i want to understand, is this purely the tax relief or are these the figures i should expect my employer to pay me??

Thanks
Rob

wapow

Dont you take a wage sacrifice?

Someone asked something similar a few days ago so im sure you will get a response soon. It is Friday night though lol but hey got the weekend!

If its wage sacrifice and you can do without the car, take the money.

heretolearn_2

Your employer isn't required to pay you a penny for petrol/mileage. It's all down to whatever is agreed between you.

The HMRC guidance relates to the tax situation, and if your employer pays you less than their maximum permitted amount, then you can claim tax relief on the difference. (only tax relief, not the actual amount, some people think the HMRC send you a cheque to pay for your petrol, but it doesn't work quite that way).

what does it state in the car allowance agreement? To be honest that is quite a generous amount per year - does your employer consider that includes a contribution for the fuel/insurance/runningcosts/maintenance, not just the basic cost of a buying a car.

robinspain

HI
Thanks for the replies so far, I definately need the car, and so far my understanding is that the petrol will be refunded to me at cost.The allowance is to fund the car loan, insurance, tyres etc etc

I guessed that the figures were HMRC guidelines, just wanted to confirm.
id be interested to know what other people get, maybe anyone else who has a similar car allowance to me, what they get back in Fuel allowance?
Rob

Dolphin1

In his last job, OH received £350 pm car allowance (less tax of course) plus 15p per mile for business miles. He also claimed tax relief on the difference between the 15p per mile that he recovered for business miles and the approved mileage rate by HMRC of 40p per mile (now 45p I think).

trudyfrench

Just what I thought about petrol. Would be really interested to know if petrol allowance is paid within hourly rate, pre tax, does this allow the Employer/business to claim any refund/benefit for paying a "higher" rate of pay to cover fuel allowance?

numbers

My employers car allowance is £500 per month, employees are responsible for all associated costs and can claim 13p a mile for business travel in Diesel vehicles up to two litres.

For most employees the £500 is subject to 40% tax so that £500 becomes £300 in the pay packet and at 13p a mile you need to be returning the guts of 50 MPG to break even.

Thanks

numbers