HMRC refusing approved mileage tax relief claim - unsure why?

joecmorgan21

Hi all,

As the title suggests, I believe I'm entitled to a tax relief for using my own vehicle for work, whilst working for my old employer. 

I was employed by a company between September 2021 and October 2023. As part of my job (network engineer) I travelled all over the country on client site visits, totalling 2381 miles during the 21/22 tax year, and 4416 miles during the 22/23 tax year. I used my own, privately owned vehicle for all of these visits, and my company did not reimburse for me for any running costs for the vehicle. For each of the visits, I paid for fuel using a company credit card - not a fuel card, a Revolut credit card. 

I claimed for the 21/22 milage allowance using the HMRC online portal.

In August 2022 I entered into a partnership with a friend, developing software. Because of this, I've submitted a self assessment for the 22/23 tax year. As part of the self assessment, I entered the number of miles in one of the sections and it calculated my 'Business travel and subsistence expenses' as £1988 (45p * 4416 miles). Which all looked correct.

I then received a letter from HMRC saying the following:

Expenses claim for the tax year 2021 to 2022

To qualify for a tax deduction for travel you must satisfy one of the following:

• the travel must be an expense necessarily incurred whilst travelling in the performance of their duties
• travel tor the necessary attendance of a temporary workplace, excluding ordinary commuting and private travel

We need more information to make sure that your claim meets one of the conditions above. Therefore, we've not given a deduction for mileage.

If you believe your claim meets one of the conditions above, please provide the following information:

• the nature of your duties and job title
• the starting point and postcode of each journey
• the finishing point and location, including postcode of each place visited
• the reason for each business journey 
• the date of each business journey 
• the distance travelled for each business journey
• the cost or the journey
• details of any private travel outside of working hours if you bought a weekly or monthly travel past
• confirmation that the claim doesn't relate to travel between home and a permanent workplace
• details of the amount of any contribution that your employer makes towards your mileage or travel costs or a letter from your employer confirming why they haven't made a contribution

Your answers to the above will give me an insight into your working environment and whether or not you may meet the legislation. On occasion, we may have to approach the employer for additional information.

So I created an excel spreadsheet detailing the date, start location, finish location, total miles and reason for each of the visits. I accompanied this with the following letter:

Regarding the above expenses claim, please find a copy of all car journeys undertaken in my own vehicle on behalf of company, for the 2021-2022 and 2022-2023 tax years.

My job title is Principal Engineer (computer networking & cyber security). I’m regularly required to travel between my home address and client sites (or the airport for visits abroad) throughout the UK. The reason for the visits can range from a single day survey of the network, to multi-day trips to install/maintain the network.

None of the journeys include a commute to or from company's office, which is located at company office address.

I do not receive a travel allowance from company, however I do not have to pay for fuel for these journeys, as this is paid for on a company credit card (not a fuel card).

I was expecting this to be enough, however (3 months later) I received this reply from HMRC:

Thank you for your letter dated 11 September 2023 regarding a claim for mileage expenses for the years 2021-22 and 2022-23. I must apologise for the delay in replying.

2021-22
You have stated in your letter that your employer does not make any contribution towards your mileage expenses but does provide a fuel card. No benefit in kind has been reported for the fuel card, which suggest either the fuel card can only be used for business purposes, or you reimburse your employer for any private fuel costs paid for using the fuel card.

As the mileage allowance relief rates are intended to cover all motoring related expenses including fuel, the amount paid for business fuel by your employer needs to be accounted for in your claim. You should therefore submit a revised claim entering the business fuel card spend in the section headed mileage allowance payments received from your employer.

2022-23
I note you have since submitted a self assessment return for this year including a claim to mileage expenses and as such, I do not intend to consider your claim for this year further.

Would somebody be able to explain exactly what they're saying? From what I can tell, they believe I've been using a fuel card for fuel, whereas I actually paid for fuel with a company credit card - are they the same thing according to HMRC? Regardless of the fuel, I believe that I should be able to claim for the running costs of using my own vehicle for work - or have I got that wrong?

Regarding the 2022-23 comment, are they flat out refusing the claim made in my self assessment - if so they don't seem to have given me a reason.

I'm completely stumped as to what they're asking for/telling me? I need to send them a reply, but I don't really know what to say. Any help would be greatly appreciated. 

BoGoF

For 2021-22 if your fuel was paid for by your employer (regardless of method) then this needs to be deducted from your AMAP claim. AMAP rates include fuel. Unless you paid the company back?

For 2022-23 they are saying as you self-assessed they are doing nothing at present. The only way to challenge a self-assessment is for them to open an enquiry, which they may do at some point.

DullGreyGuy

So you went the petrol station and put £50 in the tank which your employer paid for... what happened if the journey took £40 of fuel? Did you have to reimburse them £10? 

The 45p a mile is the total cost of the impact of the journey and given your employer did contribute towards the journey by paying for the fuel you need to deduct off all the monies they paid for fuel from your claim.  

For the second period they are saying you've already made a claim so cannot claim a second time by a different way. 

joecmorgan21

Thanks for the replies. So basically I need to go back and determine exactly how much fuel the company contributed for each of the 50+ journeys ? I should be able to get my credit card statements and work it out... 

BoGoF

joecmorgan21 said:

Thanks for the replies. So basically I need to go back and determine exactly how much fuel the company contributed for each of the 50+ journeys ? I should be able to get my credit card statements and work it out... 

The company should have reported the credit card spend on a P11D

sheramber

if it was a company credit card, did they not pay the amounts due on it?

Why are the payments on your credit card statements?

Hoenir

BoGoF said:

joecmorgan21 said:

Thanks for the replies. So basically I need to go back and determine exactly how much fuel the company contributed for each of the 50+ journeys ? I should be able to get my credit card statements and work it out... 

The company should have reported the credit card spend on a P11D

A potential much larger can of worms has been opened.  There'll be a payroll and expenses audit that's for sure. 

Jono111

You are supposed to keep a record of the work trips. Then use the mileage rate that does not include fuel from HMRC website and it's simply multiplying the mileage from your records by the reduced rate and then multipling again by your tax rate.
As HMRC have already picked up on, did you pay the company back for the fuel on your private trips, if not you should have declared the amount of free fuel as benefit in kind.

BoGoF

Jono111 said:

You are supposed to keep a record of the work trips. Then use the mileage rate that does not include fuel from HMRC website and it's simply multiplying the mileage from your records by the reduced rate and then multipling again by your tax rate.
As HMRC have already picked up on, did you pay the company back for the fuel on your private trips, if not you should have declared the amount of free fuel as benefit in kind.

Would be interested to see this 'mileage rate that does not include fuel you refer to. It would be a new one on me.

Jono111

I may have got it a bit wrong 

joecmorgan21

sheramber said:

if it was a company credit card, did they not pay the amounts due on it?

Why are the payments on your credit card statements?

Apologies, I meant my company credit card statements via Revolut. I'll have to speak to the company to get them.

Jono111 said:

Then use the mileage rate that does not include fuel from HMRC website and it's simply multiplying the mileage from your records by the reduced rate and then multipling again by your tax rate.

As another comment states, this doesn't seem to exist. The only rate I can find 45p per mile for the first 10,000 miles. So in my case for 21/22 - (45 * 2381)/100 = £1071.45. Websites such as this do the same calculation.

Jono111 said:
As HMRC have already picked up on, did you pay the company back for the fuel on your private trips, if not you should have declared the amount of free fuel as benefit in kind.

The company did not pay for my fuel for private trips. Whenever I would be working away, I would calculate roughly how much fuel I'd need for the journey, and fill up my car. Usually I'd underestimate but if I overestimated I'd deduct how much fuel was left over from the next journey. I now realise how primitive this method is, but that was company policy... I never received a private trip fuel allowance/benefit from the company.

How do I go about explaining this to HMRC?

Thanks