Claiming Millage Difference Question

davemark

Hi All

I was wondering if i could run this issue past someone

I started a job at i asked what is the millage claiming rules is it the usual 45p a mile? I was told no we pay 25p a mile but the rest you can claim back though HMRC.

I was quite new to all this having only ever got 45p in the past i thought ok that must be right....???

Now fast forward about 7 months and i have done 2,478 miles and have claimed 25p for these which is a total of £619.50 claimed and returned.

the difference up to the 45p (20p) is £495.60 so this is how much im short.

As stated i thought that as told by my employer i could claim this back from the HMRC but...... it seems this is wrong, can people clarify?

On further research and googling until i'm square eyed it seems all links to claiming back the difference points you back to the HMRC and talks just about tax relief which would be only 20% of the difference (basic tax payer) so only an extra 4p per mile which =
£99.12.

Is this correct, i have spoken to several people and most do agree that i can only claim back the relief and there is NO way to get back the complete difference however couple of people said yeah you can get it all back you do a Self Assessment and you will get it all back but apart from just them saying it i never seen how you go about it or is this just a myth ?

My company stated that i could get it all back when i joined if i knew i would not been possibly not able to i would not have agreed to use my personal car, i know its not as many miles as some do but it will only get more as we take on more clients and im on the road more.

Thanks in advance

Regards

Dave

Darksparkle

You can only get tax relief. HMRC aren't going to pay your business mileage.

Dazed_and_confused

On further research and googling until i'm square eyed it seems all links to claiming back the difference points you back to the HMRC and talks just about tax relief which would be only 20% of the difference (basic tax payer) so only an extra 4p per mile which =
£99.12.

HMRC do not simply pay you tax relief of 20%.

They will recalculate your tax position to include the expenses as a deduction from your income (in a similar fashion to the Personal Allowance).

This might mean you get 20% back although this is incredibly unlikely.

Some will get £0. For example their only income is say £11,000 and haven't paid any tax in the first place.

Higher rate payers might get 41% (or 40% outside of Scotland).

Some might get about 60% back in very specific circumstances (income between £100-123k).

If you are basic rate payer and have paid enough tax and claim after the tax year ends (which is normal) then you are realistically looking at getting about £97.

Your employer just paying you an extra 5p/mile would actually be better for you (and you could still claim tax relief on the 15p difference between 30p paid and 45p claimable as an expense)

Dazed_and_confused

however couple of people said yeah you can get it all back you do a Self Assessment and you will get it all back but apart from just them saying it i never seen how you go about it or is this just a myth ?

It's just a load of tosh. There is no real difference whether you
a) get the tax relief during the year via an adjusted code
b) get a PAYE refund after the tax year ends
c) get relief via a Self Assessment return

Caz3121

davemark wrote: »

the difference up to the 45p (20p) is £495.60 so this is how much im short.

Are you meaning short to cover your actual costs or short as in, less than you would have received in your previous job?

Dazed_and_confused

I think the means had the employer paid 45p he would have ended up with £495.60 more than he currently has.

Assuming he has paid sufficient basic rate tax then HMRC will provide an additional £97 or so leaving him just under £400 worse off than if the company paid 45p/mile.

davemark

Thanks All