New job - car allowance help

thefunkygibbon

hi,

just had a job offer and having been in a job where i've had a company car with fuel included i'm unsure about the car allowance and business miles stuff.

Is the car allowance taxed any differently than the normal wages? ie if i get 34k +4k car allowance is it the same as saying i'm on 38k?

also whats the deal with business miles? they tell me it is 25p a mile, but i've read that places usually offer either 12p a mile or thereabouts and you claim the rest back from the taxman.. or 40p a mile. at 25p can/should i be claiming anything back? does the fact i get a car allowance make any difference?

any advice appreciated.

Red_Cat

Hi,

car allowance if paid into your pay packet is taxed as basic pay. I.e. you pay tax, NIC and maybe pension contributions on it. My employer does the same. However my bonus is based off my basic pay (without car allowance). Also my car allowance is fixed for three years regardless of payrises I might achieve in that three year period.

So you can say that you are on £38K.

I am afraid that I don't know about mileage allowance, I get the minimum which is dependent upon engine size and fuel. For me that is 13p/mile.

Red Cat

thefunkygibbon

interesting. thanks.


http://ezinearticles.com/?A-UK-Employee-Can-Claim-Tax-Relief-Using-Their-Vehicle-For-Work&id=836101

The approved mileage allowance for cars and vans in the UK is 40p per mile for the first 10,000 business miles and 25p per mile for each business mile over 10,000 miles in each tax year.

confused

amf

You will be using your own car, so the statutory mileage rates are 40p per mile for the first 10,000 business miles in the year and 25p per mile thereafter. If your employer pays less than this you can claim tax relief on the balance. As your car allowance is already taxed, ignore it for the purposes of business mileage claims.