Private vehicle fuel claim for work

alandw

Hi, hopefully someone can help me get my head around the confusing rules set by HMRC!

I will be employed for a new job soon which will involve country wide travel. I will not be entitled to a company car or car allowance, but if I use my private vehicle I can claim 15p per mile back from the company. I understand that HMRC reimburse me up to 45p per mile traveled for work purposes in a private vehicle, i.e. they will cover the difference between what the employer pays and the 45p limit (or 25p after 10k miles).

So for example, if I complete 15,000 business miles in a tax year, my work will reimburse £2250 and I can claim a further £3500 from HMRC both of which can go straight into my bank. Is it as simple as that? I have read something about how it is adjusted according to your tax bracket (mine will be 20%) - is this true?

My two other questions are:
-Is it compulsory to claim that smaller 15p from my employer or could I simply claim the entire 45p/25p amount from HMRC in my tax return at the end of the tax year? (I don't see the point claiming in stages when I can just do it all in one go.)
-Is there a maximum fuel amount I can claim back from HMRC? My understanding is that I will be claiming "tax relief", but I will only be paying around £4000 in annual tax - so what if I want to claim more than this in fuel expenses at the end of the year?

Many thanks for you help, I will appreciate any advice!

Alan

getmore4less

you can't claim anything other than tax relief on the difference.

45p-15p @ 20% = 6p or 12p if 40%

15ppm +6ppm is not sufficient to pay for a car consider carefully using your own car unless the pay rate is very good.

anamenottaken

alandw wrote: »

Hi, hopefully someone can help me get my head around the confusing rules set by HMRC!

I will be employed for a new job soon which will involve country wide travel. I will not be entitled to a company car or car allowance, but if I use my private vehicle I can claim 15p per mile back from the company. I understand that HMRC reimburse me up to 45p per mile traveled for work purposes in a private vehicle, i.e. they will cover the difference between what the employer pays and the 45p limit (or 25p after 10k miles).

So for example, if I complete 15,000 business miles in a tax year, my work will reimburse £2250 and I can claim a further £3500 from HMRC both of which can go straight into my bank. Is it as simple as that? I have read something about how it is adjusted according to your tax bracket (mine will be 20%) - is this true?

My two other questions are:
-Is it compulsory to claim that smaller 15p from my employer or could I simply claim the entire 45p/25p amount from HMRC in my tax return at the end of the tax year? (I don't see the point claiming in stages when I can just do it all in one go.)
-Is there a maximum fuel amount I can claim back from HMRC? My understanding is that I will be claiming "tax relief", but I will only be paying around £4000 in annual tax - so what if I want to claim more than this in fuel expenses at the end of the year?

Many thanks for you help, I will appreciate any advice!

Alan

You cannot claim the actual difference between what your employer is willing to pay and the most which HMRC allow per mile before taxing the amount paid by the employer. If that were the case employers wouldn't pay anything, would they, they'd just let general taxation pay the whole lot.

The difference between what the employer pays and the amount which would have been allowed by HMRC is the tax on that difference.

Claim all you can from your employer.

getmore4less

oh missed the only paying £4k tax that that a salary around £30k

On the first 10k miles you will get £600 tax relief + the £1500.

10k @ 50mpg @£6pg costs £1200

alandw

Great answers, thanks!

How very misleading - the HMRC website makes it sound like you can claim the full difference... So it is effectively up to the kindness of the employer to decide how much it is going to cost employees for travelling around on the behalf of the company. Taking into account maintenance, insurance and road tax costs I can see why company cars are such a blessing!

silverwhistle

That's a very poor mileage rate: HMRC allow 45p a mile for a reason!

You could always get yourself reliable old banger, preferably with a bit of visible (safe) rust or a dent or two. If your employer complains have a look at the contract.. hmm.. and then point out it is all you can afford at the mileage rate they're offering..

getmore4less

HMRC say tax relief nearly everywhere they tal about mileage allowance relief(MAR)

https://www.gov.uk/tax-relief-for-employees/business-mileage-fuel-costs

bristol_pilot

15p is a very poor mileage rate. If I were you, I'd reconsider taking that job.

alandw

bristol_pilot wrote: »

15p is a very poor mileage rate. If I were you, I'd reconsider taking that job.

What mileage rate would you suggest is reasonable? Do many companies offer the full 45p per mile?

TELLIT01

I would expect any decent employer to provide the full 45p per mile. Don't forget, this is to cover the cost of running the car not just the cost of fuel. At 15 p per mile it won't even cover the fuel cost unless you are averaging about 44 mpg.
It would cost them a lot more than 15 p per mile to provide you with a vehicle!

Jakg

alandw wrote: »

What mileage rate would you suggest is reasonable? Do many companies offer the full 45p per mile?

My company offers 40p a mile which used to be the HMRC rate (plus an additional 1p a mile after tax rebates)

My last job paid 45p a mile but I once got conned into accepting 11p a mile (!).

I drive a diesel and ownership works out at 28p a mile (13.2p fuel / 3.2p tax/insurance/breakdown cover / 3.6p consumables (tyres, bulbs etc) / 5.1p repairs / 3p depreciation).