Opting out of company car, help with fuel claim pls!

Vikingdad

Hi,
I've searched topics but can't be sure I've found the answer to the right question!

For the first time in my career, I'm opting out of company car scheme and buying my own. Having done the sums and factored risk, I'm confident it works in my favour for the car I want to drive so taking the plunge!

Bit stuck on the fuel side though and not sure if my perception is correct so some educated help is appreciated!

Scenario is that I will be driving my car but will have a company fuel card. I will keep record of business and private miles against which the company deducts private miles x15p from my salary. So, my question is that if I can equate business fuel cost paid for by my employer to a rate per mile, can I then claim the difference back between this and the tax allowance rate of 45p per mile?

If that is the case then what is my first step to set this up with the tax office and must I do self-assessment to complete such a task?

Any guidance greatly appreciated.

MDMD

Vikingdad wrote: »

if I can equate business fuel cost paid for by my employer to a rate per mile, can I then claim the difference back between this and the tax allowance rate of 45p per mile?.

The amount you pay your employer for private mileage is usually not relevant for the business mileage calculation. On the basis the employer pays for all business mileage, by funding the fuel card, there is nothing else you can claim.

It is possible that you may be taxed on the fuel card if you do not fully reimburse the employer for the full economic cost of the fuel.

Keep_pedalling

Are you saying that all your company will pay for is fuel? If that is the case it does not look like a good move to me. If you business fuel costs work out at 15ppm then you can clam tax back on the 30p difference which at 20% is 6p so you will actually get 21ppm which does not cover much in the way of W&T or depreciation.

If you claim is for less than £2500 then you can do so on form P87.

Vikingdad

I forgot to mention that I do get a car allowance!
Since I pay tax at 40%, I assume that 6p at 20% figure will be doubled and multiplied by approx 8-9000 miles per year is worthwhile!

I had heard of this threshold of £2500, but thankyou for the clarification. Will investigate P87 and take this forwards.

Many thanks for the information. Much appreciated.

Keep_pedalling

I would have thought as you are a higher rate taxpayer you should actually be doing a tax return.

Vikingdad

Would that be because I should be, or because it may be in my interest to do so?

Am I missing a trick here?

Keep_pedalling

That depends on your situation. If you are paying into a private pension, it may well be in your interest to move to SA. If your have other sources of income such as dividends then unless they are all wrapped up in ISAs then you should be paying more tax on those and completing SA.

dori2o

Keep_pedalling wrote: »

That depends on your situation. If you are paying into a private pension, it may well be in your interest to move to SA. If your have other sources of income such as dividends then unless they are all wrapped up in ISAs then you should be paying more tax on those and completing SA.

Not necessarily.

Being a HR taxpayer is no longer an automatic trigger for Self Assessment and hasn't been since about 2008. The trigger point now regarding a persons taxable income and the need to complete a SA form is £100k, even if there is no other source of income, or anything else that meets the criteria.

In terms of investment income, only if the total combined amount of any gross interest/Dividends are in excess of £10k should you be completing an SA form, otherwise you should notify HMRC at the end of each tax year how much you received in Interest/Dividends.

Similarly, just because you may pay into a private pension does not automatically mean you should be completing a SA form, again you can notify HMRC of the amount of the annual payments made and what you expect to pay in the coming year so that your tax code can be adjusted to provide the relevant relief.

With regards to the question on the fuel card, ensure that all the private fuel is repaid or it will count as a benefit in kind.

Also, you don't need to know how much your employer is charging per mile for business use, all you need to know is the number of business miles done, plus the total amount spent on fuel and take away what the employer charges you for private use.

So if the total amount spent on the fuel card is £5000. The employer calculates your private fuel useage as £1000, that means the employer has paid £4000 for the business mileage.

If you did 20000 business miles then your calculationm would be as such

10000 miles at 45p = 4500
10000 miles at 25p = 2500

Total claim = £7000

Less the amount paid by employer £4000

Net business miles claim £3000

Tax relief given at 20% = £600

Tax relief given at 40% = £1200

If your net mileage claim is for more than £2500, i.e. the amount you want to clasim relief on, again this would mean you have to do a SA form, below this and you can either do in on a P87 or phone in.