40p per mile fuel refund... Tax free?

MJSW

No, you can't claim relief on next year's self assessment. However, you can still submit an amendment to last year's return. The time limit for amending your return for the year ended 5 April 2004 is 31 January 2006.

Paced_Out

Hi all,

I have just submitted form P87 to claim tax relief for approx. 5000 business miles. I use my own car and get a car allowance. I don't get any fuel benefits. My employer allows me to claim 9p per mile. So I have claimed the other 31p per mile from the Tax Office. However, I asked them will I get taxed on the amount due. They said yes at a rate of 40% seeing as I am a 40% tax payer. Is this correct? It seems to me that they would be taxing me on an expense which seems a little bizzare.

What do you think, am I getting duff information from the tax office. If I get taxed I'll still get a nice bundle. But if I don't have to pay tax then the amount would wipe out almost all my existing debt and leave me level pegging. My fingers are crossed!

What do you reckon?

Thanks,

Paced_Out.

ctm_2

Paced_Out wrote:

Hi all,

I have just submitted form P87 to claim tax relief for approx. 5000 business miles. I use my own car and get a car allowance. I don't get any fuel benefits. My employer allows me to claim 9p per mile. So I have claimed the other 31p per mile from the Tax Office. However, I asked them will I get taxed on the amount due. They said yes at a rate of 40% seeing as I am a 40% tax payer. Is this correct? It seems to me that they would be taxing me on an expense which seems a little bizzare.

What do you think, am I getting duff information from the tax office. If I get taxed I'll still get a nice bundle. But if I don't have to pay tax then the amount would wipe out almost all my existing debt and leave me level pegging. My fingers are crossed!

I think you might have mis-understood. HMRC won't give you the additional 31p per mile, they will give you tax relief on it at your highest rate of tax.

so 31p x 5000 = £1550

So you get relief on the £1550 at your highest rate of tax. So if you are a higher rate taxpayer, you will get relief at 40% on that £1550 which is equivalent to £620.

stphnstevey

I have just gone into the higher rate tax band. I also am able to claim back the difference between the 12p I am paid for business miles and IR rates.

Am I right in thinking that the tax relief I recieve fromk my expenses could push be back to lower rate tax band????

nearlyrich

stphnstevey wrote:

I have just gone into the higher rate tax band. I also am able to claim back the difference between the 12p I am paid for business miles and IR rates.

Is it your car or a company car?