HMRC Mileage recovery PAYE

Jonnyed

Apologies if this is answered elsewhere by I have received some conflicting information about the matter. I used to be self employed whereby the cost of my business mileage and cost of running vehicle were offset against the tax I paid and received a good rebate.

I am now employed on a PAYE basis (site work) so qualify for business mileage recovery at the HMRC rates. I use my own vehicle for work and pay for all fuel. My employer DOES NOT make a contribution towards the cost.

Let's say I cover 15000 miles a year, in my mind that 10000 @ 45p/mile and 5000 @ 25p/mile = £5750.

So via self assessment I submit my mileage to recover that amount for business mileage?

I have seen conflicting information saying that I am only liable to receive 20% of that amount!!!

Which one is it!? Seriously out of pocket if it's the latter

Any help welcomed

Altarf

You only get tax relief on what your employer doesn't pay, so it's 20% (unless you are a higher rate taxpayer).

But seriously, you drive 15,000 miles a year for your employer and they don't pay you anything?

I hope the basic pay is good.

Wayne_O_Mac

You get tax relief on the £5750 at your marginal rate, so 20% if you're a basic rate taxpayer, 40% if higher rate.

From the way you've phrased your post there's a good chance you've overclaimed relief in your self-employed time.

Jonnyed

No it's pretty bad.

00ec25

Jonnyed wrote: »

No it's pretty bad.

also bear in mind that "site work" does not necessarily mean that it is qualifying business miles which an employee /PAYE can claim - it may simply be unclaimable commuting.

There are a few key differences between being an employee and being self employed

Jonnyed

One site so far has been 140 mile round trip commute. That was 4 months, this site is 45 mile round trip commute. From the HMRC website, 'temporary places of work' can be up to 2 years duration.

Jonnyed

From what I can gather, and I know some people this applies to on a PAYE basis, if the employer chooses to reimburse at the full rate, that is received on top of pay (untaxed). I don't understand then how the expense incurred travelling to the temporary place of work can only be 20% of the value. I.e 9 pence per mile reimbursed. This doesn't even cover the cost of the fuel let alone wear and tear on the use of your own vehicle for business. I am a site manager for a SME and carry some things to and from site (short term) so as well as commuting it is also business use...... no???

Jonnyed

The cost of the vehicle was claimed for under the annual investment allowance (capital) and the business mileage was done on receipts only. Is this incorrect?

Altarf

Jonnyed wrote: »

I don't understand then how the expense incurred travelling to the temporary place of work can only be 20% of the value. I.e 9 pence per mile reimbursed. This doesn't even cover the cost of the fuel let alone wear and tear on the use of your own vehicle for business.

It isn't intended to cover the cost, that is for your employer to do!

The payments your employer should be making to cover the cost of your business mileage would be tax free. So if you got paid 45p/25p by your employer, you would get nothing from HMRC, but wouldn't pay any tax on those payments.

If you receive less than 45p/25p HMRC give you the tax relief on the missing part of the payment. What they don't do is make up the payment your employer should have given you.

anselld

Jonnyed wrote: »

The cost of the vehicle was claimed for under the annual investment allowance (capital) and the business mileage was done on receipts only. Is this incorrect?

That is correct, but tax you would only have received tax reduction of 20% of those amounts.

The tax man doesn't pay the full cost of mileage, only allows it to reduce income *if* it is allowable business mileage. Someone still needs to pay the basic expense (either you or the business).

In this case the fact that the Business will not pay suggests it is not allowable Business mileage.

Dazed_and_confused

HMRC don't actually give you 20% of your claim, they use the expenses when working out what tax you need to pay.

So if the figures in your op were roughly what you'd be claiming and your basic pay is pretty bad, as you state in another post, you many not get that much back as you have to actually paid that amount of tax to get it back.

So if you've paid say £800 in tax you could put expenses of a million £ on your tax return but you'd only get £800 back