Car Allowance Tax

pr1nql3

I'm hoping that someone can help me here as all my searches have turned up a blank and even the tax office didn't know how to guide me.

The scenario....
I used to have a company car with fuel card but moved to car allowance and can not understand my tax and what can be claimed back as a tax relief.

• I receive a car allowance that is added to my salary and income tax is paid. It is shown as 'Car Allowance' on my pay slip
• I purchased my own car and have to pay for all expenses related (servicing, tyre's, insurance, etc)
• I have a fuel card that covers company and private fuel.
• I am currently not paying any tax for the fuel card because the tax office stated they couldn't work it out until the P11d was submitted - although I am sure this will be adjusted at the end of the tax year

My first concern is that I am going to end up with a huge tax bill for the fuel card.
But what I need to understand is, can I claim any tax relief back for using my own vehicle for business miles if the company provide a car allowance that is added to salary and a fuel card?

for example:

• I receive XXX per month as car allowance, taxable as standard income tax within my salary
• All fuel is paid by the company via a fuel card
• Company submit P11d at the end of the year with the TOTAL amount spent on the card
• I will be taxed as a benefit in kind for TOTAL amount spent on the fuel card
• I do approx. 10000 business and 10000 private miles pa

Can I claim back tax relief for the 'wear' on my vehicle for the business miles?
If so, how do I go about this?

Really appreciate any help in this

TadleyBaggie

pr1nql3 wrote: »

Can I claim back tax relief for the 'wear' on my vehicle for the business miles?

Nope. This is one of the reasons I chose a company car last time.

pr1nql3

Thanks for the quick reply, do you have anything for me to reference to verify this? I was under the impression that I could claim back tax relief for business miles but wasn't sure how to work this out if the company pay for fuel

pr1nql3

blondebubbles wrote: »

]

Thank you but this does not cover my scenario. I too googled and come back with the same sort of results. It wouldn't allow me to quote your response due to it being a link

TadleyBaggie

If you were paying for your own fuel and were being paid a mileage allowance which was less than 45p per mile, then you could claim tax relief on the difference. However fuel is being paid for by the company via a fuel card, so no this does not apply.

booksurr

try not to think of the allowance as "car" related, it is simply extra money paid to you just the same as if you had a pay rise. Patently therefore it incurs income tax and NI deductions from it leaving you with net cash in your pocket. Whether you choose to spend that money on car maintenance, a night down the pub or a family holiday is your decision.

the fuel card on the other hand is different, and in your specific case, because it covers both business and private use, you:
a) incur a benefit in kind tax liability on your private use. A good company would have a way of calculating the private use element (ie you'd be submitting a mileage log showing business miles leaving a balance which is private) so they report only that figure on your P11D and you get taxed on only that sum.
b) undertake business travel for which the company pays the fuel cost but does not deduct business costs from the total P11D figure as your company lumps both private and business fuel costs together in a single figure

Therefore, in your specific case, you are entitled to submit a claim to HMRC for your business mileage at the 45/25 ppm rate as applicable and that would then give you the tax rebate you are owed in respect of the amount of tax you have (inadvertently) overpaid on the total P11D figure

Obviously you only get back the tax relief not the full 45p or 25p, in summary therefore:
- yes the company has given you money (after tax) towards car costs (or a night down the pub)
- yes the company has paid the full costs of your business trip fuels
- but you have been taxed on both private and business fuel costs so you have overpaid the tax on the business element, so that, and that alone, is what you can claim back via a business mileage claim. Your claim has nothing whatsoever to do with "wear" on your vehicle, it is simply you recovering tax you should not have paid in the first place because of the lazy way your company processes things.

pr1nql3

Thank you booksurr - much appreciated and sort of what I thought but wasn't quite sure. So when completing the P87, which I assume is how you claim this back, what is submitted for the 'Total mileage allowance payments received from your employer' box? is this zero?

Blondbubbles - I did find many forum results, not the one in your link though which clearly covers my scenario. The ones I did find seemed to contradict each other and further confused me. I think the problem with this is because it seems relatively 'unique' to receive a fuel card for a private vehicle. From what I can gather, most people receive a mileage rate and therefore it is slightly easier to comprehend.
Regardless - I do appreciate your assistance