Car fuel rebate does not cover costs - Help

bb999

My company refunds my business fuel at the agreed HMRC rate (currently 11p per mile for under 2 litre diesel.)

However, my company car only does 38-40 mpg, and so is currently costing me approx 12.5p per mile in fuel.

As I travel in the region of 1500 miles per month it is currently costing me over £20 more per month to buy the fuel than I am being paid.

Can I reclaim this amount from HMRC - or at least the tax on it - and if so how do I go about this.
If this can be reclaimed, would it also reduce my income for Tax Credit purposes so that effectively I get more tax credit?

Any help or advice will be appreciated.


(I have asked my employer to pay what it costs to run my car, but they are adamant they will not pay above the HMRC rate.)

fingerman

Any info on this would be great as I'm in a similar boat - but get 15p per mile and drive a car that does 25mpg - the car only cost £600 so I make on the car allowance

The company says the car allowance makes up for the difference - do you get car allowance ?

Bean_Counter

I've had a look on the HMRC website and my reference books but could not find anything conclusive.

I would suggested calling your local tax office to argue the case.

bb999

fingerman wrote: »

Any info on this would be great as I'm in a similar boat - but get 15p per mile and drive a car that does 25mpg - the car only cost £600 so I make on the car allowance

The company says the car allowance makes up for the difference - do you get car allowance ?

No, I don't get car allowance because the company provide the car.

bb999

Bean_Counter wrote: »

I've had a look on the HMRC website and my reference books but could not find anything conclusive.

I would suggested calling your local tax office to argue the case.

Hi,
I figured I would have to call the tax office, but ideally would have liked to be pre-armed with any info so that they can't just fob me off.

Bean_Counter

bb999 wrote: »

Hi,
I figured I would have to call the tax office, but ideally would have liked to be pre-armed with any info so that they can't just fob me off.

Hi,

Firstly I would say that you had been told (keep it vague) that you can claim the difference as an allowance then just ask them which form you should use. The when you submit the form with your claim send a covering letter referring to your conversation with HMRC dated xxx when they said use this form.

HMRC might say that the fuel rate is just an advisory rate and the employer can pay more if it actually costs more for fuel for business use. You then say that they refuse to do this. I would then say that if you get paid under the 40p per mile rate for business miles when running a private car then you can claim the difference as a tax allowance so that you are not out of pocket for legitimate business use. In the same way you do not want to be out of pocket for business use and hence to be able to claim the difference as a tax allowance.

That sounds waffly now that I read it back but you get the picture.

I have looked on HMRC website for a reference to quote to them but have not found one yet.

cash99

If you have a company car, the private fuel re-imbursement rate is set by HMRC, and I am pretty sure that you cannot claim more if your costs are actually higher. (Worth checking with HMRC direct, they do change the rates from time to time when fuel costs go up)

If you get a car allowance then this is basically just salary and taxed as such. Your employer will no doubt onlt re-imburse you for the fuel costs only, as they will consider the car allowance covers the other costs. However in this case you can claim tax relief on the difference between the HMRC approved rates and the amount re-imbursed.

Petal_3

I thought that employers could pay you whatever they liked - but - if it is more than the HMRC rate you had to show the additional on P11D and be taxed on it.

I'll try to have a look for a link or something.

~x~

Petal_3

Here you go:

http://www.hmrc.gov.uk/cars/fuel_company_cars.htm

Bean_Counter

Petal wrote: »

Here you go:

http://www.hmrc.gov.uk/cars/fuel_company_cars.htm

I came across this too, but it doesn't appear to cover the situation that bb999 has where an employer is paying less than the cost of the fuel.

If it was me I would still make a claim and see what they say.

cash99

Petal wrote: »

I thought that employers could pay you whatever they liked - but - if it is more than the HMRC rate you had to show the additional on P11D and be taxed on it.

I'll try to have a look for a link or something.

~x~

Yes sorry employers can of course pay whatever they like, but always seem reluctant to pay more than the HMRC rates.

The link you posted does cover the OPs situation and it looks the only way to get any relief is for the employer to argue that the "advisory rates" do not apply, and agree a higher rate with HMRC, but it seems this requires exceptional circumstances looking at the example given.

Still it never hurts to ask.