Self Assessment - Business Mileage

dreamypuma

Thanks All, 

Just discussed with my accountant. All sorted - Got a nice sum taken off my bill.

As suggested above, someone different must have worked on this.

Albermarle

Slightly off the topic, but I would ask your employer to pay you a better rate per mile.
16 p hardly even covers the fuel cost, never mind all the other costs of running a car.
Some employers pay the full amount allowed by HMRC ( before causing any tax issues) i.e. 45 p a mile for the first 10K miles.
Personally I would think it should be at least 30p a mile.

Grumpy_chap

Albermarle said:

Slightly off the topic, but I would ask your employer to pay you a better rate per mile.
16 p hardly even covers the fuel cost, never mind all the other costs of running a car.
Some employers pay the full amount allowed by HMRC ( before causing any tax issues) i.e. 45 p a mile for the first 10K miles.
Personally I would think it should be at least 30p a mile.

Maybe the 16 pence is after a car allowance.

Albermarle

Grumpy_chap said:

Albermarle said:

Slightly off the topic, but I would ask your employer to pay you a better rate per mile.
16 p hardly even covers the fuel cost, never mind all the other costs of running a car.
Some employers pay the full amount allowed by HMRC ( before causing any tax issues) i.e. 45 p a mile for the first 10K miles.
Personally I would think it should be at least 30p a mile.

Maybe the 16 pence is after a car allowance.

Not 100% sure, but having a car allowance would presumably affect the ability to claim tax relief on the fact the mileage payments are low.

Dazed_and_C0nfused

Albermarle said:

Grumpy_chap said:

Albermarle said:

Slightly off the topic, but I would ask your employer to pay you a better rate per mile.
16 p hardly even covers the fuel cost, never mind all the other costs of running a car.
Some employers pay the full amount allowed by HMRC ( before causing any tax issues) i.e. 45 p a mile for the first 10K miles.
Personally I would think it should be at least 30p a mile.

Maybe the 16 pence is after a car allowance.

Not 100% sure, but having a car allowance would presumably affect the ability to claim tax relief on the fact the mileage payments are low.

Nope, a car allowance is really just extra salary, albeit often not relevant for company pension purposes.

Albermarle

Dazed_and_C0nfused said:

Albermarle said:

Grumpy_chap said:

Albermarle said:

Slightly off the topic, but I would ask your employer to pay you a better rate per mile.
16 p hardly even covers the fuel cost, never mind all the other costs of running a car.
Some employers pay the full amount allowed by HMRC ( before causing any tax issues) i.e. 45 p a mile for the first 10K miles.
Personally I would think it should be at least 30p a mile.

Maybe the 16 pence is after a car allowance.

Not 100% sure, but having a car allowance would presumably affect the ability to claim tax relief on the fact the mileage payments are low.

Nope, a car allowance is really just extra salary, albeit often not relevant for company pension purposes.

I am sure you are right but seems a bit odd.
If you are supplied a company car, then you can only claim for fuel costs up to a prescribed HMRC limit . This is around 15p to 18p a mile depending on vehicle and current fuel prices. No possibility to claim any further tax relief AFAIK.

Being supplied a company car or being paid a car allowance, are effectively the same thing ( and both are taxed) , so strange there is a difference in what you can claim for fuel.

[Deleted User]

Albermarle said:

Dazed_and_C0nfused said:

Albermarle said:

Grumpy_chap said:

Albermarle said:

Slightly off the topic, but I would ask your employer to pay you a better rate per mile.
16 p hardly even covers the fuel cost, never mind all the other costs of running a car.
Some employers pay the full amount allowed by HMRC ( before causing any tax issues) i.e. 45 p a mile for the first 10K miles.
Personally I would think it should be at least 30p a mile.

Maybe the 16 pence is after a car allowance.

Not 100% sure, but having a car allowance would presumably affect the ability to claim tax relief on the fact the mileage payments are low.

Nope, a car allowance is really just extra salary, albeit often not relevant for company pension purposes.

I am sure you are right but seems a bit odd.
If you are supplied a company car, then you can only claim for fuel costs up to a prescribed HMRC limit . This is around 15p to 18p a mile depending on vehicle and current fuel prices. No possibility to claim any further tax relief AFAIK.

Being supplied a company car or being paid a car allowance, are effectively the same thing ( and both are taxed) , so strange there is a difference in what you can claim for fuel.

Not really. With a company car the employer pays for servicing, repairs, insurance, road tax and takes the hit on depreciation. With a car allowance, the employee has that responsibility. 

The 45p per mile for the first 10000 miles for a private car is supposed to contribute to the normal wear and tear of the vehicle (which is why it reduces to 25p thereafter). With a company car the employee does bear the cost of the wear and tear, hence the lower rates. 

Grumpy_chap

Albermarle said:

Being supplied a company car or being paid a car allowance, are effectively the same thing ( and both are taxed) , so strange there is a difference in what you can claim for fuel.

No, they are not.

If you are supplied with a company car, then you get exactly that and all costs are covered by the employer except for petrol.  The employee pays income tax on a BIK which is determined from the car list price and emissions.  The AMAP mileage rate is for petrol costs associated with business mileage and nothing above that can be claimed by the employee as tax allowance.

If the employee has a car allowance, then there is a sum of money added to base salary and treated exactly the same as salary for income tax and national insurance.  The employee has to provide a car and meet all the costs.  If the employer then pays a mileage rate that is less than the 45 pence / 25 pence, the employee can claim the difference against their taxable income.  (They can claim back the income tax on that difference, not the full value of the difference).

Hope that helps

Albermarle

Grumpy_chap said:

Albermarle said:

Being supplied a company car or being paid a car allowance, are effectively the same thing ( and both are taxed) , so strange there is a difference in what you can claim for fuel.

No, they are not.

If you are supplied with a company car, then you get exactly that and all costs are covered by the employer except for petrol.  The employee pays income tax on a BIK which is determined from the car list price and emissions.  The AMAP mileage rate is for petrol costs associated with business mileage and nothing above that can be claimed by the employee as tax allowance.

If the employee has a car allowance, then there is a sum of money added to base salary and treated exactly the same as salary for income tax and national insurance.  The employee has to provide a car and meet all the costs.  If the employer then pays a mileage rate that is less than the 45 pence / 25 pence, the employee can claim the difference against their taxable income.  (They can claim back the income tax on that difference, not the full value of the difference).

Hope that helps

Where I worked, you could have a car allowance or a company car ( only in certain jobs of course) .
 The car allowance was big enough to cover the costs of running your own car, including maintenance.
When you worked out all the costs, tax etc it was debatable which was best . 
In this case it does not make sense that the person who takes the car allowance can claim some tax relief  on the difference between 45P and what the company pays per mile.

I suppose in the tax system it is assumed that the a car allowance will not cover the full cost of running a car, but in some cases it can.

Grumpy_chap

Albermarle said:

In this case it does not make sense that the person who takes the car allowance can claim some tax relief  on the difference between 45P and what the company pays per mile.

Since when did tax have to make sense?

In fact, I think it does make sense.  The individual can either have a car and therefore carries no costs or risks, or takes the car allowance and then has to cover costs and risks.  The allowance is treated like any other "cash" salary payment.  The individual is then using their own car and can claim the mileage allowances like any other individual using their own car.

I can't see how this could be any different.