tax credit's and mileage payments

donnaghall

Hi all, can anyone tell me about tax credits and mileage payments?
I use my own car as a home care assistant. I recieve 45p per mile. I pay for my petrol and claim back the amount in miles, I need business ins cover on my ins for work and the cost of upkeeping my car.

The payment for mileage is included in my NET income therefor is used as EARNINGS when calculating tax credit award

It is not earnings as I have put in the petrol at my own cost in order to work and am simply reimbursed for this.

I only work 90hrs per month and have roughly £70 mileage on top of the 90hrs worked. My tax credits are reduced by £70 as they are including this as EARNED INCOME

What can I do as I find this unfair...advice gladly welcomed....thank's

Caz3121

this may help https://www.gov.uk/guidance/tax-credits-working-out-income

WillowCat

Reimbursed expenses for business mileage is not counted as income unless they are at more than 45p per mile (where the difference would be income).

So your expenses should not be used when calculating your tax credits.

donnaghall

Hi...thank you for replies I will check this out and let you know how I get on.....my local MP agreed with me last year but is now telling me that it should be included. He has e/mailed yesterday to which I have still to reply to. I will read what I can prior to replying to him...again thank you

sheramber

Is the mileage payment taxed?

Darksparkle

Tax credits is based on your taxable income not your net income.

Is your mileage included in your gross or net income? If included in your gross have you asked your employer why as 45p per mile (for first 10,000 miles) shouldn't be taxed.

Also tax credits doesn't reduce £1 for £1, it's 41p for every £1 earned.

sheramber

Travelling from home to client may not be business mileage, but normal commuting.