Mileage claim help

markj_87

Hi all,

Just a couple of queries on mileage claims for work:

1) In the past couple of tax years there have been quite a lot of instances where I have been unable to claim back from my employer anything for mileage to a client's premises. I understand I can get tax relief for this - is it sufficient just to send a letter to HMRC detailing the amount of miles and how much I have been able to reclaim (compared to the 40/45p per mile SMRS amount) and they will amend my tax code to give relief, or will I need to fill out a tax return?

2) The mileage reimbursement scheme used by my work (when I am able to claim) is that you claim the lesser of work/client and office/client distance which is reimbursed at 40p/45p per mile. Therefore, if the client is 1 mile from the office, but 10 miles from my home, I can only claim 1 mile, ie 45p. Do I claim tax relief for the other 9 miles in this instance, or is the 1 mile all I should be getting reimbursed for in the eyes of HMRC?

Thanks very much.

Dal_Whinnie

The rules which HMRC apply in relation to claiming business mileage may well be different (as in this case) to that which your employer pays. Assuming that you do not have a company car then basically, where the mileage claim allowed by HMRC exceeds that paid by your employer you may claim tax relief on the excess. This can be done either by writing to HMRC or including on your tax return.

There are guidelines and restrictions on what counts as business miles. Assuming that you are based in one office and do not make regular trips to the same alternative work place then the rules are fairly straightforward. You can claim any trip from home to client if the journey starts from home and does not go via your office. If you go via your office then it is the distance from your office to your client that counts. In the example you give, are you spending the day (or a substantial part of the day) at your clients and then returning home or going on to your office. If you do not go into your office (or only go in to pick up or drop off some papers or something on your way to or from your client) then you can claim the full mileage from home.However, if you only make a short stop at a clients on the way to your office to drop off papers or something then HMRC may not allow that since they will consider your trip as effectively being from home to your office.

markj_87

Hi Dal Whinnie,

Thanks very much for your reply.

In terms of the nature of these visits, I am an auditor and so drive straight to clients' premises from my home and stay there for the entire day before returning home, which will go on for a week or two before the next client job starts. Any trips to the office would be, as you say, dropping things off or collecting a file etc.

Does this then mean I should also be claiming relief for instances such as the one I have stated, where I have only claimed 1 mile (as this is the distance from the office) despite me having travelled 10 miles from home and not actually visiting the office that day?

Thanks.

Dal_Whinnie

The basic legislation for employees mileage is contained in Income Tax (Earnings and Pensions) Act 2003

s337 and subsequent sections give details of when an employee can claim costs of business travel and s231 which states

The amount of mileage allowance relief to which an employee is entitled for a tax year is the difference between–

(a)the total amount of all mileage allowance payments, if any, made to the employee for the kind of vehicle in question, and

(b)the approved amount for such payments applicable to that kind of vehicle.

Based on the information you have given I would expect you to be able to claim for the 20 miles (return trip from home to client) at 45p for the first 10,000 miles less any reimbursement by your employer. The legislation views your total journey as being a business journey whereas your employer works on the basis that it will only pay you the extra miles. This is not an uncommon approach.

There is also an argument that you may be able to claim the cost of lunch if this is not paid by your employer,

ceh209

Hi Mark, I do the same job as you.

Look up a P87 form on HMRC's website. You can use that to claim the tax relief on the difference in mileage if your total expenses are under £2500, if it's above that they'll make you do a tax return.

I'm doing a P87 for the first time this year - I'm just filling in the form but keeping my own records of mileage in case they ever investigate. If you do it for each audit when you do your expense claims, it really doesn't take long at all.

prayerc

I have worked as a Civil Servant in a Public sector and have done so for 7 years and during this time, i have only claimed car mileage for two years. I have a car user allowance in my contract but I have not been claiming for the past 5 years. Am i still able to claim and if so how do i go about it?

Dal_Whinnie

prayerc wrote: »

I have worked as a Civil Servant in a Public sector and have done so for 7 years and during this time, i have only claimed car mileage for two years. I have a car user allowance in my contract but I have not been claiming for the past 5 years. Am i still able to claim and if so how do i go about it?

Firstly, when you say you have a car user allowance do you mean that you receive a fixed addition to your salary each month and this is included as taxable income within your PAYE calculations. If that is the case then this payment is not set off against any expenses you might be able to claim since it is effectively additional salary on which you have paid tax.

Having just passed the end of a tax year you can now only claim back to 2008/09 which has to be done by 5 April 2013. Your earliest periods are therefore out of time.

How you go about this will depend on whether you have submitted a Tax Return or not. If you have (and will for 2011/12) then I understand the process to be as follows:

2011/12 - include on your Tax return when you submit this
2010/11 - you should send HMRC an amended Tax Return by 31 January 2013
2008/09 and 2009/10 - write to HMRC setting out details as to why you think your tax is incorrect

If you do not fill in a Tax Return then you need to advise HMRC and as ceh209 has said, you should use form P87 (you have to use this if your expenses are more than £1,000, you're claiming for older tax years or it is your first claim)