Business Mileage Claim?

5ilent_Assassin

Hello, my company provides me with a personal car allowance and also provides me with a fuel card for both business and personal use. The company doesn’t deduct any costs from me. I record my annual business mileage. The company deducts my business mileage from my total annual mileage and provides a P11D to HMRC for personal fuel BIK.

Can I claim the 45p business mileage from HMRC for the wear and tear on my personal car?

MyRealNameToo

the 45p includes fuel and your employer is already paying the fuel so you can't claim the full amount

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/6653423/business-mileage-claim

No, not fully.

You receive a car allowance. Let's assume £350m per month. £4.2k per year. This is subject to income tax and NI in the same way as £4.2k of additional salary would.

You then provide your own car which you use for insurance purposes.

You have a fuel card through which the employer pays all your fuel. This is subject to income tax based upon the actual fuel spend.

Your employer reimburses your fuel for business mileage, presumably at AFR rate so about 12 pence per mile for business mileage. If we assume 10k business miles, that would be £1.2k

You can claim the income tax relief for the 10k miles at the AMAP rate less the amount already received. Up to 10k miles, AMAP is 45 pence per mile. That would be £4.5k. Deduct the £1.2k already assessed as business miles paid at AFR. £3.3k against which you can claim tax relief at your marginal rate. If you are a basic (20%) rate tax payer, that reduces your income tax liability by £660.

You can claim via your self assessment return if you are required to do one, or there is a simple form available via HMRC website.

5ilent_Assassin

https://forums.moneysavingexpert.com/discussion/comment/81866605#Comment_81866605

My employer doesn’t reimburse me for business mileage. I don’t claim it because my employer pays for the fuel.

Grumpy_chap

Yes, I understood that your employer does not pay you mileage but pays a car allowance plus fuel.

From a tax perspective, the car allowance is treated as additional salary and taxed in exactly the same way as you simply earning more. The car allowance does not count as a contribution towards mileage.

The fuel, however, does qualify as a contribution towards mileage so reduces the 45 pence per mile (assuming <10k business miles) against which you can claim tax relief.

I have read through the advice I gave and believe it is correct and also not sure how I would rephrase it to be clearer. Is there any specific part that confuses you and I will try to re-state in a clearer fashion.

5ilent_Assassin

Thank you. In your response you stated “Your employer reimburses your fuel for business mileage, presumably at AFR rate so about 12 pence per mile for business mileage. If we assume 10k business miles, that would be £1.2k”

What is AFR rate?

flaneurs_lobster

HMRC's Advisory Fuel Rates.

Google is your friend…..

5ilent_Assassin

https://forums.moneysavingexpert.com/discussion/comment/81867826#Comment_81867826

This is the bit that’s confusing me. My employer pays for my fuel, therefore I don’t claim for business mileage at the AFR

molerat

But the employer does not pay for mainting the car. Insurance, tyres etc so you claim the mileage less their fuel contribution. The full mileage rate covers both fuel and maintenance.

5ilent_Assassin

So if I work out the actual fuel cost per mile and deduct this from the 0.45p for business mileage, I can multiply the difference by my business miles and claim tax relief on that amount?

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81867837#Comment_81867837

https://forums.moneysavingexpert.com/discussion/comment/81868236#Comment_81868236

No.

In the OP, you stated "The company deducts my business mileage from my total annual mileage and provides a P11D to HMRC for personal fuel BIK."

What is the rate per mile used in that calculation for the business mileage / personal mileage proportion?

In my post upthread, I had to put some assumptions. Can you give actual figures as that will then allow us to give a more accurate indication?