Car Allowance, Mileage and P11d

lal5000 · 20 September 2018 at 11:56AM

I am getting so confused with this. Hopefully someone can help!

I am PAYE. I earn £60k a year with a car allowance of £5400. Its construction based.

I get paid a gross allowance of £450 a month and claim back mileage on a pick up truck of 13p a mile. 2.5 litre diesel.

I also have a part time business in beekeeping for which I am required to complete a self assesment tax return.

On my beekeeping tax return, I claim the full 45p a mile for any business mileage (its surprising how this mounts up) and it will never get anywhere near the 10000 mile per annum limit.

For my PAYE job, I also understand that I am entitled to a seperate 10000 mile per annum limit (45p) and then 25p for all mileage after that. So I claim this within the same self assesment application (seperate businesses). I average around 20k miles a year.

I am relatively comfortable with the above (but please point out if this isnt correct).

Now it gets 'interesting/frustrating'...

My partner has just moved from company car to car allowance (mainly because the pick up truck is so inefficient and I wanted to use the more efficient car). Completely seperate company.

But her system is way more confusing than mine.

She gets a car allowance of £500 per month gross but they give her a fuel card and enrol her into a Mileage Management Scheme.

The scheme caps the net 'allowance' each month at £500 (her allowance).

She enters her business mileage into a system that apportions her car allowance into a tax free package and non tax free package (this is capped at the full amount of car allowance net, in this case, £500). If she did a crazy amount of business mileage then she can claim anything over any above via self assesment with HMRC. But fundamentally, the most she can get each month is £500 net. Her Tax and NI is reduced accordingley.

All personal and business fuel is purchased on a company fuel card and this is listed on her P11d (not sure if its just personal or personal and business on the P11d). I assume its just personal.

Now, here is the issue. If the fuel is paid for by her company, and she is paying the tax on it, can I claim a fresh 10000 mile per annum limit (45p) on the same vehicle for travelling to my PAYE job, using the fuel she has purchased through her companies fuel card?

My guess is yes, its fuel that is provided by her company that she has paid tax on but it does seem their may be some double dipping going on.

I do all my own accounts and thus far they have been relatively simple, but I fear it may be time to get the accountant involved with this one!

One final note. We are both covered in terms of insurance for ALL vehicles with private business insurance for all drivers.

Any comments or advice would be greatly appreciated.

lal5000 · 20 September 2018 at 7:26PM

Hmmm.

Other half is given personal fuel as a benefit in kind. Pays tax on it and it therefore becomes hers.

She then gifts that to me and I use it for business mileage which I claim 13p a mile for and tax relief on the wear and tear to the car. These are two separate and distinct payments.

The fuel has been paid for and is only being claimed once for tax relief.

Not sure that would amount to fraud but I guess that's why I'm asking the question.

Last thing I want is to be caught out by HMRC

lal5000 · 20 September 2018 at 7:27PM

I wouldn't be out of pocket but my partner would be out of pocket by an equal amount

lal5000 · 20 September 2018 at 7:37PM

00ec25 wrote: »

you don't seem to understand what the tax releif that you are claiming means

when you pay for your own fuel and use that fuel on a busienss journey ...
- if your empoyers allows you to claim at the 45ppm rate you are deemed to not be out of pocket
- if they pay less than 45ppm you are deemed to be oput of pocket and entitled to claim tax relief on the money you spent on the car running cost which has not been reimbursed to you at the full rate

read what you have written again. You are asking can you get tax relief for using fuel you did not pay for in the first place. That would be fraud, since you are not out of pocket for anything.

Assuming I could use the fuel, what calculation would you propose I used for claiming back costs? Even if you were to assume the fuel had nil cost, 20k miles per anjum clearly has some tax liability on a vehicle for wear and tear, insurance, tyres, services, accidents etc.

My company would obviously raise an eyebrow if I just didn't claim anything back?

sheramber · 20 September 2018 at 9:07PM

if your employer pays you a mileage allowance you need to deduct that from the tax relief you claim.

lal5000 · 20 September 2018 at 9:26PM

I'm aware that I only claim back the tax on the delta between 45ppm and the 13ppm provided by the company. 45p-13p = 32p

32p x 0.4 = 12.8ppm in terms of tax relief.

The query is more around transferring personal mileage from a seperate employer into my business mileage.

the more I think about it, I dont think its actually possible which is a shame.

Not sure how I'm going to pay for my own fuel in my partners car where they insist the fuel is purchased through the fuel card.

It would look as if the mileage was incredibly high compared to the fuel purchased on the card.

jimmo · 20 September 2018 at 10:38PM

You seem to be overthinking this. Under the employment earnings rules there is nothing wrong with you using your partner's car and claiming the standard mileage allowances. See the penultimate paragraph here:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim31255
It really doesn't matter who pays for the fuel and there is no fraud involved. The standard mileage allowances are statutory. End of.
Apart from getting confused about your partner's employment arrangements you were correct in your original post.

lal5000 · 20 September 2018 at 11:02PM

Ah that simplifies things somewhat.

The view from my company would be, I am doing business mileage in a vehicle they don't have to provide anything for, so would pay 45ppm or allow me to claim tax relief to that effect.

My partners company are satisfied as she is paying the tax on her personal fuel through her p11d.

lal5000 · 20 September 2018 at 11:09PM

Is it really as clear cut as that?

Its certainly the case that we can interchange between cars. We could effectively share the same car and each get a 10000 mile/45p limit on the same vehicle.

I also know I'm eligible to claim 2 x 10000 mile/45p limit for my 2 very different businesses. 1 x PAYE and 1 x sole trader.

However, I'm just not 100% sure on the tax implication of using fuel for my business that had been paid for by another business (albeit minus the tax element) for personal mileage.

jimmo · 21 September 2018 at 10:48PM

Yes it really is as clear cut as that.
The HMRC Staff Manuals do not seek to go into details of every possible variation of circumstances. As an example in the link I gave yesterday it says an individual could use his/ her spouse's car and still claim. In fact you could use your next door neighbour's car or you could hire a car and still claim the standard mileage rate. However any financial arrangement between you and your neighbour or the car hire charges are of no concern to HMRC so far as your mileage allowance claim is concerned. Similarly who actually pays for the fuel used in your business travel is irrelevant.
Moving on, if you had 2 separate employments you could claim up to 10,000 miles at 45p for each job.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim31280
You could have 3 jobs and claim 3 lots and so on.
On the other hand if, as seems likely in your case, you use 2 or more similarly classed vehicles in the same job or business you can only claim 10,000 miles at 45p.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim31275

Rules is rules.

lal5000 · 21 September 2018 at 11:19PM

Ok. Yes, I get that I can have 2 x 10000 mile allowances for my 2 seperate jobs/businesses but I can only claim 10000 miles per business, regardless of how many vehicles I use.

I didn't make that clear in the opening statement. It sounded like I would have 3 x 10000 mile limits for 2 jobs and 2 vehicles, which would definitely be flouting the rules.

Thanks again for clearing up my queries.

Appreciate it.

Car Allowance, Mileage and P11d

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