Mileage and car allowance

Adrianlivya12

Hello,
im employed and receive a car allowance of 5k a year.
I also get 25p per mile up to 10k miles.
And 
15p per mile beyond that.
I do roughly 15k miles a year.

am I allowed to claim the difference in mileage up to 45p and 25p the government set out.?

Grumpy_chap

Yes.  You can claim back the income tax paid on the difference in rates.

Adrianlivya12

Brilliant thanks

Adrianlivya12

Why do employers pay less than the 45p rate ? 

Grumpy_chap

Employers can pay whatever they choose.
In your case, they probably take into account the car allowance, so the mileage is only paying the extra for fuel and maintenance.  25p / 15p is generous on top of car allowance.  Typically, mileage after car allowance is only paid around 11p.

Adrianlivya12

Grumpy_chap said:

Employers can pay whatever they choose.
In your case, they probably take into account the car allowance, so the mileage is only paying the extra for fuel and maintenance.  25p / 15p is generous on top of car allowance.  Typically, mileage after car allowance is only paid around 11p.

Sorry why would they not pay 45p if it not coming out of their pocket.does it affect them at all if I do claim the rest?

Car_54

Adrianlivya12 said:

Grumpy_chap said:

Employers can pay whatever they choose.
In your case, they probably take into account the car allowance, so the mileage is only paying the extra for fuel and maintenance.  25p / 15p is generous on top of car allowance.  Typically, mileage after car allowance is only paid around 11p.

Sorry why would they not pay 45p if it not coming out of their pocket.does it affect them at all if I do claim the rest?

Whose pocket do you think it would come from?

What you claim is entirely between you and the taxman.

Grumpy_chap

Adrianlivya12 said:

Grumpy_chap said:

Employers can pay whatever they choose.
In your case, they probably take into account the car allowance, so the mileage is only paying the extra for fuel and maintenance.  25p / 15p is generous on top of car allowance.  Typically, mileage after car allowance is only paid around 11p.

Sorry why would they not pay 45p if it not coming out of their pocket.does it affect them at all if I do claim the rest?

Is "they" the employer?
If so, if the employer pays 45p, then that comes straight out of the employer's pocket.  
Who else's pocket could the 45p come out of?

Are you misunderstanding how the tax relief works?
For clarity, if you do 100 miles reimbursed by the employer at 25p, that's a payment of £25.  Assuming less than 10k miles in total, the maximum payment without creating a tax liability would be at the rate of 45p, so £45.  Difference between permitted payment £45 - £25 = £20.
You can claim that difference against tax and gain relief at your marginal rate, usually 20% or 40%.  So, the tax relief you can claim is worth £4 or £8.  Per 100 miles.

Ajmason42

I’m just about to come out of our car scheme and we get the 10p or what ever mile rate plus the allowance. My argument is the allowance is the car cost and depreciation and insurance the mileage rate should pay for fuel, tyres wear and tear and the service cost. 

Only reason I’m coming out is we now have to have a small electric car which I appreciate is the future but for personal use is not practice would love to know how I can drive to the south of France that only goes 200 miles before needing a full recharge. That takes an hour at a fast charge that can cost Circe 30 euro. so in theory adds about 6 hrs journey time. Plus the hassle of finding a charging point. 

DrEskimo

Ajmason42 said:

I’m just about to come out of our car scheme and we get the 10p or what ever mile rate plus the allowance. My argument is the allowance is the car cost and depreciation and insurance the mileage rate should pay for fuel, tyres wear and tear and the service cost. 

Only reason I’m coming out is we now have to have a small electric car which I appreciate is the future but for personal use is not practice would love to know how I can drive to the south of France that only goes 200 miles before needing a full recharge. That takes an hour at a fast charge that can cost Circe 30 euro. so in theory adds about 6 hrs journey time. Plus the hassle of finding a charging point. 

How often do you go to the south of France? Would you not gain from the fuel savings 99% of the mileage you do use it for, then could use that savings to rent whatever car you desire to go to the south of France?