Personal allowance and travel expenses

TheGardener

Hi
Not sure if I am being a bit dim here but: I got my notification for my tax code for the coming 2014/15 year today. My personal allowance is £10,000 but they have deducted £159 (which I assume is the payments I get towards my mileage) giving me a tax code of 9841L. I am paid 45p per mile by my employer and do around 150 miles business mileage a month. So does this mean I am paying tax on the mileage allowance ? I thought the 45p was 'tax free'
Thanks

purdyoaten

Your tax code is probably 984L, not 9841L. The 45p is indeed tax free and there should be no deduction in your allowances for this. Is there any other explanation on your P9?

TheGardener

Sorry - yes - code is 984L - its on a P2 and it says 'taxable expenses payments' paid by my employer for expenses "such as using your own car or phone to carry out your employers business" I don't receive any other expenses or payments except occasional rail fare reimbursement and the mileage previously mentioned.

00ec25

TheGardener wrote: »

Sorry - yes - code is 984L - its on a P2 and it says 'taxable expenses payments' paid by my employer for expenses "such as using your own car or phone to carry out your employers business" I don't receive any other expenses or payments except occasional rail fare reimbursement and the mileage previously mentioned.

if you drive more than 10,000 business miles pa then the approved HMRC rate reduces from 45ppm to 25ppm

it would appear that HMRC believe that you do more than 10k as they have decided to reduce your code to recover tax relating to mileage expenses. if you claim at 45ppm over 10k you are making a "profit" of 20ppm and this is then treated as a taxable expense payment

has your employer ever given you a copy of a P11D form which lists the values of all expenses paid to you? HMRC have either made a mistake with your records or duff info has come to them from your employer or accurate info has come from the employer which you did not know about eg: some mileage you do is actually taxable

if the only expense you incur is annual mileage of 1,800 then you need to query with HMRC because your tax code should not have been reduced

zagfles

Does your employer pay you for mileage which HMRC regards as taxable, such as extra trips to your normal place of work (eg callout at weekends etc)?

TheGardener

10,000 miles!! Lordy, I doubt my old banger would even last that distance - the most I have ever done in a month is 200 miles - its usually around 150 so my mileage is nowhere near that high. Sometimes the meetings I go to are in the evening or at weekends but these meetings are not at my normal place of work or office, they are local places like village halls and I get time of in lieu - no overtime or anything. I don't get expenses for anything else - I work in the public sector and earn less than the national average wage so absolutely no other expenses other than flat 45p per mile and I occasionally get a train and get my ticket refunded through expenses. I have wondered about this for some time because it was the same last year and the year before that.

zagfles

Do you get any non-cash benefits, for instance a parking permit etc?

Do you get a P11D? If not ask your employer about whether they submit one to HMRC and if so get a copy.

TheGardener

nope - as I say, I work for the public sector and there absolutely no taxable benefits I can think of anywhere, no subsidised canteen, no enhancements for working out of hours, no parking permits, no discounted travel, no healthcare, absolute zero employment benefits.

I'll look tomorrow for the P11D - everything we have is electronic - not even the 'perk' of a paper payslip theses days