Company business millage reimbursement policy

Anne2019

Hi,
I am very new to UK to work.
I sometimes need to do business trip by my own car.
Company provide GBP 400 car allowance per month for me but also allow me to claim millage.
Currently, they provide 15p per mile plus car allowance.

I check on website and always said 45P per mile.
Is it legal to provide 15P , not 45P???

Thank you so much for you guys help,

Anne

Alice_Holt

Anne,

You have posted on the Benefits forum.
You may get more info by posting on the Tax or Employment forum.

But, yes it is legal.
45p per mile is the maximum mileage rate allowed (for Tax purposes) by HMRC before needing to report the payment to HMRC. It is not a legal minimum.
https://www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax

Tom99

Anne2019 wrote: »

Hi,
I am very new to UK to work.
I sometimes need to do business trip by my own car.
Company provide GBP 400 car allowance per month for me but also allow me to claim millage.
Currently, they provide 15p per mile plus car allowance.

I check on website and always said 45P per mile.
Is it legal to provide 15P , not 45P???

Thank you so much for you guys help,

Anne

45ppm is meant to be the all in cost but you already get £400pm car allowance so the 15ppm is just for petrol etc.
You will be paying tax on the £400pm and I think you may be able to claim tax relief on the 45p less 15p for your business mileage.

zagfles

It's normal - if you get a car allowance the company usually only pay you petrol rates. But you can claim tax relief on the difference between the HMRC rate and the rate the company pays (assuming the allowance is fully taxed, ie just added to your taxable income).

See https://www.gov.uk/tax-relief-for-employees/vehicles-you-use-for-work

You're probably aware but it's also essential to have business use covered on your car insurance (usually class 1).

crackerberry

Anne2019 wrote: »

Hi,
I am very new to UK to work.
I sometimes need to do business trip by my own car.
Company provide GBP 400 car allowance per month for me but also allow me to claim millage.
Currently, they provide 15p per mile plus car allowance.

I check on website and always said 45P per mile.
Is it legal to provide 15P , not 45P???

Thank you so much for you guys help,

Anne

Yes it's legal.
You can however claim back 20% or 40% (|depending on your tax bracket) of the difference back from the tax office.



Say you do 10,000 business miles. 30p difference per mile (45p-15p=30p) x 10,000 miles = £3,000. You'd get either £600 or £1200 back, according to which tax bracket you are in.

Craig1981

each tax year you can complete a P87 form and claim back the difference between 15p and 45p (30p a mile. do it yourself and dont use a company advertising it, it will cst you for their services!
use this:
https://www.gov.uk/guidance/claim-income-tax-relief-for-your-employment-expenses-p87

Dazed_and_confused

each tax year you can complete a P87 form and claim back the difference between 15p and 45p (30p a mile. do it yourself and dont use a company advertising it, it will cst you for their services!
use this:
https://www.gov.uk/guidance/claim-income-tax-relief-for-your-employment-expenses-p87

Sensible suggestion about not using a third party but the bit in bold is totally wrong.

HMRC do not pay business mileage expenses, if they did why would your employer bother even paying the 15p

You can claim tax relief on the difference as crackerberry has explained.

A couple of extra points to note, you cannot get a tax refund if you haven't paid any tax or if you've only paid say £300 in tax then that would be the maximum refund you could get irrespective of the amount of expenses being claimed. And if your claim is £2,500 or more then you cannot use the P87 form but have to complete a Self Assessment return.