Car Allowance & Mileage Payments

Ellwood8

Hi,

I currently receive £410 pm car allowance which is taxed @ 20%, I took out a PCP using this allowance and some of my own cash to buy a new car

I have to do a minimum of 9,000 business miles a year and was previous reimbursed 21p per mile. However this has been reduced to 10p per mile.

Does this mean i am eligible for tax relief? Should this be claimed at the end of the tax year

Thanks
Jake

Darksparkle

HMRC rates for your personal car are 45p per mile for first £10,000 miles and 25p per mile thereafter so yes you can claim tax relief on the difference between what your employer reimburses and HMRC rates.

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

Ellwood8

Thanks - does this need to be at the end of the tax year?

strong8096

we do ours end of each tax year

redpete

It also means you could claim for previous years where you have been paid 21p per mile.

strong8096

agree with redpete, I file hubbies, this year filed for 12 lads that never thought they were allowed mileage expenses and gone back 4 years on all of them

Darksparkle

Ellwood8 wrote: »

Thanks - does this need to be at the end of the tax year?

Yes because you won't know your exact mileage beforehand.

You can claim previous years though.

UglyJoe

Ellwood8 wrote: »

Hi,

I currently receive £410 pm car allowance which is taxed @ 20%, I took out a PCP using this allowance and some of my own cash to buy a new car

I have to do a minimum of 9,000 business miles a year and was previous reimbursed 21p per mile. However this has been reduced to 10p per mile.

Does this mean i am eligible for tax relief? Should this be claimed at the end of the tax year

Thanks
Jake

Can I ask you why your employer has reduced the mileage allowance paid?

I acknowledge that fuel prices have tumbled from their highs, but not by over 50%

keith969

UglyJoe wrote: »

Can I ask you why your employer has reduced the mileage allowance paid?

I acknowledge that fuel prices have tumbled from their highs, but not by over 50%

Simple really, companies want to cut costs, so they get the taxpayers to pay. Name them and shame them I say.

redpete

UglyJoe wrote: »

Can I ask you why your employer has reduced the mileage allowance paid?

I acknowledge that fuel prices have tumbled from their highs, but not by over 50%

They reduce it because some of the costs are deemed to be covered by the monthly car allowance. 10p a mile is the current government recommended amount to cover the cost of fuel.