Using own car for work

[audi321]

Hi all. I've just started a new job and they require me to visit clients using my own car, although they only pay 25p/mile in expenses.

I see on the HMRC website that they allow me to claim the difference between the 25p my company give me, and the 45p HMRC allowance. But what's not clear is how I do this and how much I get. Is it 20p/mile in my pocket or tax relief of 20p/mile?

i.e. Lets say I do 5000 miles (which @ 20p/mile difference is £1000), do I, in effect, get an increased NRB by £1,000 so I get £400 in my pocket or do I get an increase of NRB by £4000 to get to the £1000 I am short of the 45p the HMRC say I am due? (I am a 40% tax payer)

Thanks all.

[quinny100]

You get tax relief on the difference, so £400 for your example.

[bogie]

keep records of your business miles and then you claim it back when you do self assessment tax return each year. It goes under "business expenses"

[Pit Pony]

If they only pay 25p, they are barely covering your costs. Add up the cost of fuel, repairs, servicing, insurance, repairs and depreciation, on all but the sttyest stter, over 1 year, divide by the number of miles, and you'll find 25p a mile is a joke.

[audi321]

quinny100 said:

You get tax relief on the difference, so £400 for your example.

Cheers, so i'm getting effectively 33p/mile (25p from work and 8p from HMRC)? And if I was a 20% tax rate, I'd only be getting 29p/mile?

It doesn't seem right that the HMRC say you can claim 45p/mile but yet there's no way you can ACTUALLY get 45p/mile unless your company pay that?

Edited by audi321 on Monday 15th December 22:40

[gaz1234]

Should be 45p

[Eric Mc]

If you already complete Self Assessment tax returns, them the simplest way is to make the claim as part of the completion of the return.

If you DON'T complete a tax return normally, perhaps the easiest way to make the claim is to contact HMRC by phone and tell them about the situation. They should be able to amend your PAYE tax coding so that the relief is given to you through the PAYE system.

HMRC also has a special short form for employees to make tax relief claims for expenses they incur in employment called a Form P87

https://www.gov.uk/government/publications/income-...

[Pit Pony]

audi321 said:

Cheers, so i'm getting effectively 33p/mile (25p from work and 8p from HMRC)? And if I was a 20% tax rate, I'd only be getting 29p/mile?

It doesn't seem right that the HMRC say you can claim 45p/mile but yet there's no way you can ACTUALLY get 45p/mile unless your company pay that?

Edited by audi321 on Monday 15th December 22:40

If you work for the NHS they pay 54p a mile and you get taxed on 9p of it, because they asked a number of motoring organisations to work out a fair rate for them.

My ltd company pays me 45p as it's easier that way (mind you I own the company)

[mad4amanda]

I used to claim this (but IIRC it was more like 67p a mile then for the first 10k miles then a lower rate) it was termed "unclaimed benefit in kind" and made a big difference to the tax code .

[TwigtheWonderkid]

gaz1234 said:

Should be 45p

That's the HMRC recommended figure, but they are not obligated to pay it.

[Zigster]

Pit Pony said:

If they only pay 25p, they are barely covering your costs. Add up the cost of fuel, repairs, servicing, insurance, repairs and depreciation, on all but the sttyest stter, over 1 year, divide by the number of miles, and you'll find 25p a mile is a joke.

Yeah - last year my company chopped our mileage allowance from 45ppm to 15ppm. That barely covers the cost of petrol on a basic supermini let alone a decent car. We can claim the difference back via our tax returns which effectively gives us a rate of 25ppm-30ppm which helps a bit.

End result: where sensible, most of us now take taxis and trains for business which costs the company more than paying us 45ppm.

[Vee]

Don't you get a cash allowance in addition to the 25p per mile ?

[audi321]

Vee said:

Don't you get a cash allowance in addition to the 25p per mile ?

No I'm afraid not.

[Pit Pony]

Zigster said:

Pit Pony said:

If they only pay 25p, they are barely covering your costs. Add up the cost of fuel, repairs, servicing, insurance, repairs and depreciation, on all but the sttyest stter, over 1 year, divide by the number of miles, and you'll find 25p a mile is a joke.

Yeah - last year my company chopped our mileage allowance from 45ppm to 15ppm. That barely covers the cost of petrol on a basic supermini let alone a decent car. We can claim the difference back via our tax returns which effectively gives us a rate of 25ppm-30ppm which helps a bit.

End result: where sensible, most of us now take taxis and trains for business which costs the company more than paying us 45ppm.

Ah the law of unintended consequences. You'll also be asking for more pay, as if you were doing 10K at 45p a mile and using a stter with no depreciation, you might be achieving 20p a mile profit, or £2K tax free, which is worth say, £3k before tax and NI

[economicpygmy]

Make sure you have buisness insurance added to your policy (if its not already).

[hman]

Hope you are getting a good car allowance, if not "oh dear my car has broken down and is uneconomical to repair" would be my answer. They should give you a company car or start paying a car allowance that covers the purchase and running of the car for business use. It seems a vehicle is required for your job so they should either provide one or give you an allowance .