Car fuel Allowance ??????

pmrush

Hello,

This is my first post on this site, so hello to everybody.

I've just claimed for fuel allowance at work for 2007/2008 this is my own car used for work related driving to and from jobs

i did 11,165 miles business miles

my employer pays me 19p per mile

so i can claim 40p per mile back of the goverment upto 10,000 miles
after that 25p per mile

10,000 @ 40p = £4000
1165 @ 25p per mile = £291.25

total = £4291.25

Less the 19p per mile my employer pays 19p@ 11,165 miles = £2121.35

Leaves a difference of £2169.90

am i entitled to the full £2169.90 or am i taxed on this amount.

I received a cheque for £499.40 from the tax people and i'm not sure how they reached this figure.

I have phoned them today but they were hopeless and didn't really know

Any body clarify my position on this and confirm how much i should of received.

Thanks for the Help.


Paul.

Conor_3

Because you're entitled to TAX RELIEF on that amount, not the amount itself.

Say for example you earn £20,000 per year but claim 10,000 miles at 40p per mile which is £4000 as your employer doesn't pay you anything. That is classed as being taken off your gross income so in effect, you get £4000 of your wages tax free. Income tax is 20% of that £4000 so you would get a cheque back for £1000 because you've paid income tax based on £20,000 but after mileage allowances have been taken off, your taxable pay is actually £16000 so you've paid too much tax. Its the tax you've overpayed which gets refunded.

As your employer reimburses you to some extent, you can only claim the balance of the pence per mile allowance as you've rightly said. You'll not have paid tax on the portion your employer has reimbursed you as they will have listed it as a tax free expense.

Basically, the cheque you get should be 20% of what you claim is the expense if your income is under the higher tax bracket and this is what you've received.

redux

pmrush wrote: »

Leaves a difference of £2169.90

am i entitled to the full £2169.90 or am i taxed on this amount.

Neither. That's the allowance your tax code would be adjusted by, and hence you'll get tax relief on that.

pmrush

Cheers for the quick response guys,

Disappointed by them though, my employer told me when i started i would be entitled to claim the full 21p back.

looks like its time to stop using my car then, with diesel at £1.29+ it's costing me roughly 13p a mile now and its only going to go up.

i'm getting 6p per mile for wear and tear....lol:eek:

for tyres and servicing a year your looking at £500+ repairs.


thanks for the help.

Paul.

standupguy

I think your employer is taking the "p"

You should be receiving some sort of monthly allowance for your car (which would be taxable in your salary) in addition to the mileage allowance.

Otherwise you should be getting a much higher mileage allowance if you were to include wear and tear on the vehicle etc.

Your employer may think that the tax man pays you the extra but as you see he doesn't. Your employer may be unaware of this or he may just be trying to get away with paying less out

It may be an idea to discuss this with your employer if he needs you to continue to use your car between jobs

If he did not want to pay a car allowance on top, he could pay you say 40p per rmile which is more in line with your costs.

Whilst you would then not have any extra tax allowance at least you will receive an extra 21p per mile tax free?

AdrianHi

pmrush wrote: »

my employer pays me 19p per mile

I don't think you could run a 7 year old 1.0 L city car for 19p + tax relief on the other 21p.
Your employer is robbing you blind on car use expenses here, if I were you I'd march into the HR dept. and obstinately refuse to drive one more business mile until they pay up the full 40p per mile with a promise to increase it when the government does.
Your being bleed dry here as your car depreciates, you not receiving enough compensation which will enable you to replace the car when it wears out.

Conor_3

Anyone else here betting that the employer is putting through 40p a mile on their books?

beachlou

Sorry to butt in on your thread, but can I ask how you go about getting the money for milage? Bascially, my H2B gets paid 14.4p per mile (I know how poor this is) and any extra money we could get at the moment would be fantastic. He did just over 23,000 business miles for 07/08. Can he claim? If so, how does he claim? We're rather confused over it all.

Many thanks

Conor_3

Download, print out and fill in a P87 "Tax relief of Expenses of Employment " form from the HMRC website. Work it out as 10,000 miles at 25.6p a mile and 13,000 miles at 10.06p per mile.

Send it to the tax office address shown on the P60.

Bob63

Conor wrote: »

Income tax is 20% of that £4000 so you would get a cheque back for £1000

Sorry for being pedantic but if the OP is claiming back the last tax year when income tax was 10%, 22% or 40% depending on income. This year it is 20% or 40%.

At 22% the OP would get back £477 from the claim of £2169 - pretty close the amount received. The £22 difference could be explained by a minor PAYE overpayment for the year on something else.

Mike

beachlou

Conor wrote: »

Download, print out and fill in a P87 "Tax relief of Expenses of Employment " form from the HMRC website. Work it out as 10,000 miles at 25.6p a mile and 13,000 miles at 10.06p per mile.

Send it to the tax office address shown on the P60.

Perfect-many thanks.

Does anyone know how long approximately it takes to all go through (assuming everything goes without a hitch)?
Thanks