Car tax help needed please

mb3006

I am doing an exam shortly and am struggling to find the answer to how the following would be treated to allow me to calculate someone's net income and wondered if some clever person might be able to help.

In the scenario someone receives £600 per month car allowance. It states that half of this is not taxable as income as it is paid in lieu of a mileage claim and the other half is taxable. Do I just use the £300 per month (i.e. £3600 p/a) as a benefit in kind and deduct it from the personal allowance and then treat the other £300 as net income and not deduct any tax from it or does the other £300 p/m form part of the persons income for tax purposes...or neither?

Many thanks for any help

ILW

Not sure what in means by £300 in lieu of mileage claim.

Any

I've never heard it either... I don't think you can do that. Mileage claims have to be supported by the mileage diary, yo cannot just do estimate and "in lieu".
It might be a trick question.

mb3006

I just assumed that it meant he paid all his own work mileage (whatever that might be as it doesn't tell us!) and that this £300 was a contribution towards it. I took the other £300 to be a benefit in kind