Car allowance - wear & tear

Willdabeast

Hi,

My work are in the process of changing from company car with fuel card, to car allowance and fuel card.

Just to check is there anything that can be claimed against wear and tear (tyres/servicing etc) for the car, or is that all deemed to be covered by the allowance?

The only reason that I ask is if you don't have a fuel card and claim for business mileage, the government pence per mile rate is quite a lot above fuel costs and you can cover wear & tear as well as fuel. If you just get business fuel paid for on card, it seems you lose the chance to cover those costs.

Thanks

Darksparkle

HMRC rates for use of personal car are 45p per mile for first 10,000 miles and 25p per mile thereafter.

You can claim the tax relief on the difference between HMRC rates and business mileage paid by your employer.

You'll need to keep accurate records of your business mileage eg start and end mileage, reason for travel. You cannot include your ordinary commute.

Willdabeast

Darksparkle, thanks for the reply but my company are providing a credit card for all fuel, we then advise private mileage done each month and they take the set ppm out of our wages. E.g. 500 miles @ 11ppm = £55.00 taken off pay that month.

By doing it that way I cant see anyway of claiming anything extra over the car allowance to cover the wear and tear, unless i'm missing something?

Darksparkle

Willdabeast wrote: »

Darksparkle, thanks for the reply but my company are providing a credit card for all fuel, we then advise private mileage done each month and they take the set ppm out of our wages. E.g. 500 miles @ 11ppm = £55.00 taken off pay that month.

By doing it that way I cant see anyway of claiming anything extra over the car allowance to cover the wear and tear, unless i'm missing something?

Eg If you do 10,000 miles per year. HMRC allows you to claim tax relief at your appropriate rate on £4,500 less the amount reimbursed by your employer.

If the fuel card is less than this then you can claim the difference. Eg the fuel card was £2,000 - you claim tax relief on £2,500.

Willdabeast

But my employer is not reimbursing me as all mileage is on the company credit card with me paying them the £0.11ppm for private mileage.

So the above is not relevant to me, unless i'm totally misunderstanding it?

Thanks

Darksparkle

Willdabeast wrote: »

But my employer is not reimbursing me as all mileage is on the company credit card with me paying them the £0.11ppm for private mileage.

Thanks

Isn't your employer paying your fuel card?

If so then that amount is already being paid for you, so you can claim the difference between the amount the employer pays and the amount you can claim for HMRC rates (if anything left).

Simple way of thinking of it:
1. Work out business mileage x HMRC rates
2. Take away amount employer has already paid for you via the fuel card
3. Claim tax relief on anything remaining

Willdabeast

Ah think I', getting it now . ...

Your correct in that my employer pays for all fuel with a company credit card and I the then just minus private mileage via my monthly wages. So if they deduct £0.11 ppm from me for private mileage, I can then claim back £0.34ppm (£0.45 - £0.11 for 1st 10,000) x 10,000 @ 20% or 40% tax?

But that would only work for private mileage, which I assume I cant claim against, as how would I be able to work out what they pay for business miles?

Darksparkle

Willdabeast wrote: »

Ah think I', getting it now . ...

Your correct in that my employer pays for all fuel with a company credit card and I the then just minus private mileage via my monthly wages. So if they deduct £0.11 ppm from me for private mileage, I can then claim back £0.34ppm (£0.45 - £0.11 for 1st 10,000) x 10,000 @ 20% or 40% tax?

But that would only work for private mileage, which I assume I cant claim against, as how would I be able to work out what they pay for business miles?

No you deduct the amount the employer has paid, not the amount you paid your employer back for private fuel.

To be honest it would be far easier if you just paid all fuel yourself and your employer reminbursed you for business miles at HMRC rates. Can you ask them to consider doing that instead?

Willdabeast

Thanks for bearing with me Darksparkle, I will be asking about the option to pay for fuel personally and then claim it back from them.

If that's not an option then at the end of each year I just request what my employer has paid for fuel on my cars card and minus my personal mileage (which i will keep track of). So If I had done 10,000 business miles and they paid on average 0.13ppm for the fuel, I could then claim 10,000 miles @ £0.32ppm = £3,200.00 @ either 20% or 40% rate.

comeandgo

When we had car allowance the allowance was nearly £400 a month and that was to cover the cost and wear and tear of the car.

Willdabeast

It does seem like a lot of money but after tax and covering 25,000 business miles a year, the depreciation and running costs are very high.

I just wanted to see if there was anything else available to help with those costs.