Business Miles Allowance - Company Paying 30p a mile and not 45p

Alan_Honan

HI,


My company gives me a car allowance of £5k and currently offers 30p a mile rather than the HMRC 45p.


The company said that it wont pay 45p as they already pay to the up keep of the car with the allowance.


I believe I can get reimbursed for the 15p through the HMRC - Before I call any tips?


1) Should I say get an car allowance?
2) Do I offer an annual mileage as guidance? I do approx. 7,000 annual miles
3) Do I get taxed at 40% of the 15p difference


Appreciate any help - Not sure my the company is pushing me towards the tax office.


Thanks for any help / guidance.


Alan

jefaz07

45p is for occasional use. And goes towards things like wear and tear, you are getting 5k for this. So they won’t pay those rates. What engine do you have to get 30p a mile. Seems a good amount.

Alan_Honan

HI Jefaz,

I have a 2 litre diesel - Can i claim the gap through the tax office ? If so do I get taxed 40% on the 15p gap?

Appreciate your time.

Thanks,

Alan

molerat

You do not get a "car allowance", you get £5K extra pay which is taxed the same as any other pay. You can claim the extra 15p per mile against tax at whatever rate you pay. You cannot get the extra 15p back just a 3p or 6p reduction in tax according to what rate you pay. https://www.gov.uk/tax-relief-for-employees/vehicles-you-use-for-work

Caz3121

you don't "claim the gap" you can claim tax relief
HMRC rates 7,000 miles @ 45p = £3,150
paid from employer 7,000 miles @ 30p = £2,100
difference = £1,050
tax relief @ 20% = £210
tax relief @ 40% = £420 keep a note of all your business miles and claim at the end of the tax year

Alan_Honan

HI Caz,

If I press the business to pay the extra 15p would they be able to get fully reimbursed through corporation tax?

Just seems difficult to swallow that I only get 40% of the gap ... and not 100% if they paid the full 45p..

Do you think I'mbeing fair... Would be interesting to know from a company perspective.

Thanks,

Alan

BoGoF

To get an allowance and 30 ppm is generous. Remember they don't have to pay you a penny.

Yes the extra 15ppm would be an allowable cost for them but they have already said no? Would you be happy if the said ok to the 45ppm but no car allowance?

Alan_Honan

Hi Bogof,

Yes i could ask to just opt out and then ask for 45p for mileage - Not sure what the benefit of that given thatthey already pay £5k as an allowance.

Thanks,

Alan

Thrugelmir

Alan_Honan wrote: »

Do you think I'mbeing fair... Would be interesting to know from a company perspective.

Your employer will be incurring Employers National Insurance of 13.8% on the car allowance paid. Total cost to the company is therefore £5,690.

Your choice which car to run. Given the car allowance paid. Unsure why you would expect full reimbursement of mileage costs on top. Not a situation I've ever encountered. Particularly as it could impact a number of employees in similar situations. The additional 15p a mile would cost your employer another £1,050 per annum based on your current mileage alone.

cloud_dog

BoGoF wrote: »

To get an allowance and 30 ppm is generous. Remember they don't have to pay you a penny.

It is. OP accept you are in a better position than most. My company has only ever paid the Gov advisory mileage rates (currently 11ppm for me) and I claim the TR on the difference.