P87 or Self Assessment for Mileage Claim

RedCeylon

Hi All,

I know P87/ Fuel Card has been discussed a lot here. Having gone through them I thought I knew what I have to do. However, I encountered an error on the P87 online application form. Apparently, I need to go for self-assessment rather than P87. I hope you can confirm that whether I am doing something wrong here.

Car Allowance: Monthly Car Allowance. Get taxed per normal tax rates
Business Miles: 7000
Personal Miles: 2000
Fuel Card: Pays for both Business and Personal Mileage
P11D form contains the full fuel charge (£1400) for business and personal.
Mileage Relief = 7,000 * 0.45 * 0.4 (higher tax rate) = 1,260
Since the claim is 1260 which is less than 2500, I thought I can use P87 form.

On P87 online form, application asks whether I am claiming using my own vehicle. Selected Yes
Then when asked for Business Mileage (7000 miles), it calculates expense as 7000 x 0.45 =3150
Then application asks, ‘Have you received any mileage allowance payments from your employer?’ I said no.
Since that was only expense I was claiming relief, I answered no to all other questions.

However, application raises an error at the end saying

Total expenses claimed for tax year 6 April 2017 to 5 April 2018 can't be more than £2500.

Hence it appears the only option for me is to fill out Self-Assessment. Have I done something wrong here?

00ec25

fundamental misunderstanding: the expense is the expense, not the tax relief on the expense

expense = miles x ppm rate

tax relief = expense x tax rate

2 totally separate values, hence rejection as your expense is >£2,500

I'll bet when you do your tax return as a higher rate taxpayer you'll get a shock at how much tax you have not declared on other income you get

[Deleted User]

The P11D form entry is a bit perplexing?

RedCeylon

Thank you for the reply.

Going through the other P87 examples on the forum, I thought 7000 business miles not a huge amount.

Thank you for the heads up Tax Returns. However there are no additional income. Only tax that was not taken away on monthly payslip is the fuel card amount.

RedCeylon

All Fuel payments are made via the Fuel Card. They have included full Fuel card balance (except for the VAT) as Fuel Benefit on P11D. From what I read elsewhere, this seems like a standard practice, unless you are paying back (to the employer) for Private Mileage