Explain Mileage Allowance Relief

caveman38

Can you explain please.
If I use my own car and my company give me £3000 car allowance and pay business fuel at say 10p a mile.
I know that if I do 20000 business miles I can claim off the Inland revenue 10000 @ 40p and 10000 @ 25p = £6500 minus £2000 that the company reinburses me. The result is £4500 to claim from IR. Is that a £4500 tax rebate or £4500 tax relief to add to my following years tax code which would equate to £990 hard cash.

CLAPTON

its 4500 tax relief so 990 in hard cash if you are a 22% tax payer

caveman38

Can you please explain why http://times.cashorcar.co.uk/ show the amount as cash and not relief.
If you use my data:
Age 25 Male RM7 0RS
Peugeot 207 Base
No contributions and no free fuel
20000 Company miles 1000 Personal Miles
£3250 Car allowance
Claim Government 40p / 25p fuel allowance.
It shows that I would be £300 month better off buying my own car on a PCP

withabix

It's £990.

caveman38

I'm not disputing the £990. I would just like to know why the using the
http://times.cashorcar.co.uk/ and http://www.theaa.com/allaboutcars/companycartax/cashorcar_input.jsp?page=cashcar

show that I would either have £600 to buy a car each month or I would be £300 better of if I bought my own 207 on a PCP?

20vt-rs

CLAPTON wrote: »

its 4500 tax relief so 990 in hard cash if you are a 22% tax payer

I'm in a sililar situation and considering opting out of a car scheme. I get 11ppm flat rate and would also be able to claim the difference back from tax man. Is this £900 odd a one off rebate per year or monthly or goes against your tax code? I am unsure how it works....

Also how do I work out if I'd be better off opting out or not?

jennifernil

caveman38 wrote: »

Can you please explain why http://times.cashorcar.co.uk/ show the amount as cash and not relief.
If you use my data:
Age 25 Male RM7 0RS
Peugeot 207 Base
No contributions and no free fuel
20000 Company miles 1000 Personal Miles
£3250 Car allowance
Claim Government 40p / 25p fuel allowance.
It shows that I would be £300 month better off buying my own car on a PCP

They are assuming that your employer actually pays you the 40/25p you are entitled to receive tax free. But as you have discovered many employers do not. So all you benefit from is the tax relief.

jennifernil

20vt-rs wrote: »

I'm in a sililar situation and considering opting out of a car scheme. I get 11ppm flat rate and would also be able to claim the difference back from tax man. Is this £900 odd a one off rebate per year or monthly or goes against your tax code? I am unsure how it works....

Also how do I work out if I'd be better off opting out or not?

Once you tell them what you are getting and how far you are driving you can request a tax refund at the end of the year if you paid too much, you need to request and send in a tax return. For the next year they will factor it into your code number so you pay roughly the correct amount of tax.

This only works well if you do approximately the same mileage every year. And you need to, and indeed should, put in a return every year to get it totally correct. Some years you may be due them. Then you can elect to pay the following January or have it done via your tax code.

I always found it was best to keep each year separate and pay up if necessary.

Working out which is best for you is not easy as there are so many variables. If you do a very high mileage it puts a lot of wear on the car and reduces its resale value quicker. For us a lot depended on what car was offered. We preferred to choose our own car. If you want/need a bigger vehicle you may need to buy your own.

rward69

hi

can someone remind me which form i need to get to claim back the relief on my mileage. i get 0.13 from my employer so i wanted to send a claim to the revenue in the new tax year. thanks richard

sammyjammy

Its a P87 you can download it from their website

stphnstevey

What happens about cars if your an Ltd?