tax relief on personal car used for business!

Laura1202

Hi,

So i need some advice....
I use my own personal car for business (all round the UK)
I get a monthly car allowance from my employer as I choose to drive my own car rather than taking a company car. This monthly sum is taxed.
My employer provides me with a fuel card for all my fuel (business and personal).
On a weekly expense form i tell my employer how many business and personal miles I drive and the cost of the fuel for my personal trips is deducted.

Several of my colleagues say that I can claim tax relief ignoring the fact my employee pays for a percentage of my personal fuel and gives me a taxable monthly allowance.

Thanks

Pennywise

You should be able to claim tax relief using HMRC's official rates of 45p/25p per mile LESS the amount of money your employer has paid for the fuel, leaving you with a balancing claim for wear & tear, insurance, repairs, road tax, etc. At the moment, you're personally bearing all the costs of running the car, except for the fuel. Yes, they're paying you an allowance, but you're being taxed on it. So you are eligible to claim tax relief to offset some of the tax you're paying on the car allowance.

Bansky

Thanks - didn't know (or even think) about claiming Tax Relief. Probably lost out quite a bit over the years (presumably 20% of what the company has paid me).

00ec25

Bansky wrote: »

Thanks - didn't know (or even think) about claiming Tax Relief. Probably lost out quite a bit over the years (presumably 20% of what the company has paid me).

your reply does not convince me you really understand what is being said

perhaps a made up example will clarify?

you drive 500 business miles plus some personal miles
you spend £150 on fuel using the company card.
your employer deducts whatever the charge is for the personal mileage, lets say £50

your tax relief claim is as follows:
500 business miles at 45 pence per mile = £225
from that you deduct the business fuel the company has paid for : £150 - 50 = 100
your expense claim is therefore 225 - 100 = £125

HMRC will then pay to you the tax relief on that expense. Lets assume you are a 20% tax payer.
You will therefore get a refund of £125 x 20% = £25

you will NOT get 20% of what the company paid you! You will get £25 in this example.