Business Mileage Allowance with Company Fuel Card

robcol1305

Since my company replaced company cars with an allowance, I lease a vehicle for business use. My company provides a fuel card and each month I submit my business miles; they then calculate a business mileage cost using a rate of 20p per mile and the difference between fuel purchased less the business cost is charged back to me via payroll as my private fuel cost. 
My question: Despite having a Company fuel card, as they use a 20p per mile rate to calculate the business mileage cost, am I entitled to claim tax relief (mileage allowance) via HMRC?   

DullGreyGuy

So you are leasing the car from your net salary?

robcol1305

DullGreyGuy said:

So you are leasing the car from your net salary?

Yes, the allowance is taxed and subject to NI. 

Bookworm105

robcol1305 said:

DullGreyGuy said:

So you are leasing the car from your net salary?

Yes, the allowance is taxed and subject to NI. 

ok, in that case you are using your personal car for work purposes and so are entitled to claim tax relief on the difference between the approved mileage rate and the 20p your employer pays you for your business mileage ONLY. 
I hope you have kept a mileage log of each business trip? If not, you are open to challenge

Albermarle

Bookworm105 said:

robcol1305 said:

DullGreyGuy said:

So you are leasing the car from your net salary?

Yes, the allowance is taxed and subject to NI. 

ok, in that case you are using your personal car for work purposes and so are entitled to claim tax relief on the difference between the approved mileage rate and the 20p your employer pays you for your business mileage ONLY. 
I hope you have kept a mileage log of each business trip? If not, you are open to challenge

Not sure this is correct. This is what I understand.

It seems the OP gets a car allowance in their salary ( which is subject to tax and NI) . They then lease a car using their own money.

They then get free fuel, and are then charged back for personal mileage.

So although they are effectively using their own car for business use, they get an allowance for this, plus business use fuel costs . So I do not really think they can claim anything, unless maybe the car allowance is very small. 

Bookworm105

Albermarle said:

Not sure this is correct. This is what I understand.

Not sure this is correct. This is what I understand.

It seems the OP gets a car allowance in their salary ( which is subject to tax and NI) . They then lease a car using their own money.

They then get free fuel, and are then charged back for personal mileage.

So although they are effectively using their own car for business use, they get an allowance for this, plus business use fuel costs . So I do not really think they can claim anything, unless maybe the car allowance is very small. 

the size of the "car allowance" is irrelevant, it is no different to extra salary as it is taxed in full

as the employer calculates business use at 20ppm then the employee is entitled to claim for the difference because the deduction from their (net) pay for the use of the fuel card is higher than would be the case using the AMAP rate
Business Millage Claim For Personal Car With A Company Fuel Card. - Community Forum - GOV.UK (hmrc.gov.uk)

mybestattempt

This may also help:

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim31200

Albermarle

Bookworm105 said:

Albermarle said:

Not sure this is correct. This is what I understand.

Not sure this is correct. This is what I understand.

It seems the OP gets a car allowance in their salary ( which is subject to tax and NI) . They then lease a car using their own money.

They then get free fuel, and are then charged back for personal mileage.

So although they are effectively using their own car for business use, they get an allowance for this, plus business use fuel costs . So I do not really think they can claim anything, unless maybe the car allowance is very small. 

the size of the "car allowance" is irrelevant, it is no different to extra salary as it is taxed in full

as the employer calculates business use at 20ppm then the employee is entitled to claim for the difference because the deduction from their (net) pay for the use of the fuel card is higher than would be the case using the AMAP rate
Business Millage Claim For Personal Car With A Company Fuel Card. - Community Forum - GOV.UK (hmrc.gov.uk)

You may well be right but I still say it is not logical. You could have one employee completely funding their own car, and another employee doing the same, but enjoying a car allowance/increased income. Yet they can both claim tax relief, when in effect the second employees car is indirectly fully/part funded by their employer. 

Phoenix72

Albermarle said:

Bookworm105 said:

Albermarle said:

Not sure this is correct. This is what I understand.

Not sure this is correct. This is what I understand.

It seems the OP gets a car allowance in their salary ( which is subject to tax and NI) . They then lease a car using their own money.

They then get free fuel, and are then charged back for personal mileage.

So although they are effectively using their own car for business use, they get an allowance for this, plus business use fuel costs . So I do not really think they can claim anything, unless maybe the car allowance is very small. 

the size of the "car allowance" is irrelevant, it is no different to extra salary as it is taxed in full

as the employer calculates business use at 20ppm then the employee is entitled to claim for the difference because the deduction from their (net) pay for the use of the fuel card is higher than would be the case using the AMAP rate
Business Millage Claim For Personal Car With A Company Fuel Card. - Community Forum - GOV.UK (hmrc.gov.uk)

You may well be right but I still say it is not logical. You could have one employee completely funding their own car, and another employee doing the same, but enjoying a car allowance/increased income. Yet they can both claim tax relief, when in effect the second employees car is indirectly fully/part funded by their employer. 

Logical or not it is correct. HMRC do not distinguish between a 'car allowance' or salary, which in effect a car allowance is.

No different to an employer fully reimbursing business mileage in full using AMAP rates and one paying 10ppm leaving the employee to claim tax relief on the difference and being out of pocket. 

robcol1305

Thank you all for your input.  Much appreciated.  I have compared the following two scenarios - (a) I pay for the fuel and (b) the company pays for the fuel via the fuel card.  Lets imagine my total fuel cost was £100 and I did 750 miles in total - 250 business miles and 500 personal.

In scenario (a) I would claim 250 miles at 20p via company expenses = £50.  I could then apply for the mileage allowance (250 business miles x 25p (45p - 20p)) which is a £62.50 claim. At 20% basic tax it would be a £12.50 rebate. Therefore, I've paid out £100, reclaimed £50 in exps and received a £12.50 rebate so overall it's cost me £37.50.

If I now consider a company fuel card (b), the company pay the £100 fuel cost, they calculate business miles = £50 (250 x 0.20p) and so charge me the balance for private miles = £50. If I then claim the mileage allowance in the same manner, again I would get £12.50 rebate. Therefore, my company have charged me £50 and I have reclaimed £12.50 so overall, I have spent £37.50. 

In both scenarios, it has cost me the same for private miles so I feel justified to process the claim.
Thanks again everyone. 

Bookworm105

Albermarle said:

Bookworm105 said:

Albermarle said:

Not sure this is correct. This is what I understand.

Not sure this is correct. This is what I understand.

It seems the OP gets a car allowance in their salary ( which is subject to tax and NI) . They then lease a car using their own money.

They then get free fuel, and are then charged back for personal mileage.

So although they are effectively using their own car for business use, they get an allowance for this, plus business use fuel costs . So I do not really think they can claim anything, unless maybe the car allowance is very small. 

the size of the "car allowance" is irrelevant, it is no different to extra salary as it is taxed in full

as the employer calculates business use at 20ppm then the employee is entitled to claim for the difference because the deduction from their (net) pay for the use of the fuel card is higher than would be the case using the AMAP rate
Business Millage Claim For Personal Car With A Company Fuel Card. - Community Forum - GOV.UK (hmrc.gov.uk)

You may well be right but I still say it is not logical. You could have one employee completely funding their own car, and another employee doing the same, but enjoying a car allowance/increased income. Yet they can both claim tax relief, when in effect the second employees car is indirectly fully/part funded by their employer. 

"logic" has nothing to do with it. You seem unable to accept that a "car allowance" is simply extra pay that is subject to (normal) tax and so is just a pay rise. In the scenario you use both employees are funding their own car, it just so happens one employee is paid more than the other, and so finds it "easier" to fund their car.

The contract of employment may (or may not) stipulate how much of that allowance has to be spent on purchasing (leasing) a car, but the fact remains the car is not being "funded" by the employer, it is a personal car. I know of people who get a cheap car and pocket the extra pay for non car personal expenditure because their contract of employment is not restrictive

The tax treatment of the mileage is the same for both employees; 20ppm instead of the AMAP rate, and therefore they get less than they are permitted in respect of the use of a personal car on business.