Claiming back business miles.. Layman speak

Claiming back business miles.. Layman speak

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Teddye4687

Original Poster:

377 posts

148 months

Wednesday 1st April 2015
quotequote all
Hypothetical scenario. Let's say I pay 20% tax.

In my last job, I was paid £0.45 per mile for business expenses.
100 miles would see £45 in my pay packet. I understand it's not subject to tax.

My new employer doesn't reimburse for business mileage. I can therefore claim this back from the Government via tax return.

Would 100 miles still see £45 in the form of a cheque? I'm looking into it and keep interpreting it as 'tax relief', which would mean I claim back the tax paid on £45, meaning I only get £9 (£45 * 20%)

Am I missing something here?!

anonymous-user

54 months

Wednesday 1st April 2015
quotequote all
You get tax relief on the *actual* cost incurred, not the 45p

Out of interest, what does the employer reimburse you for? Or do they build an allowance into salary?

pmanson

13,382 posts

253 months

Wednesday 1st April 2015
quotequote all
As I have a car allowance through work I do the following:

Claim 18p ppm on my work expenses

Claim the tax back on the difference between the allowable rate (45p) and the rate i'm paid. As a 40% taxpayer it adds up quite nicely.

Typically I end up with a small cheque and a change to my tax code each year


Are you sure they don't pay for business mileage? Commuting I could understand (eg. Home to standard place of work) but not to pay anything is a bit odd. I'm not sure how you'd go about claiming it back.

Teddye4687

Original Poster:

377 posts

148 months

Wednesday 1st April 2015
quotequote all
There are no expenses etc factored into the salary, no car allowance etc. There is a pool car, but this is often used by other employees which requires us to use our own vehicles at times. They don't reimburse any travel expenses (that's not a problem, I just need to understand what I can reclaim)

pmanson

13,382 posts

253 months

Wednesday 1st April 2015
quotequote all
Teddye4687 said:
There are no expenses etc factored into my salary. We have a pool car, but this is often used by other employees which requires us to use our own vehicles at times.

They don't reimburse any travel expenses
Will they cover train tickets? I'd be refusing to travel unless I had use of the pool car

Teddye4687

Original Poster:

377 posts

148 months

Wednesday 1st April 2015
quotequote all
pmanson said:
Teddye4687 said:
There are no expenses etc factored into my salary. We have a pool car, but this is often used by other employees which requires us to use our own vehicles at times.

They don't reimburse any travel expenses
Will they cover train tickets? I'd be refusing to travel unless I had use of the pool car
Appreciate where you're coming from, but I'd like to just focus on the bit re business miles in personal car.

I don't want this to turn into whether or not they're a good employer etc, just what I can claim back from the tax man

Pheo

3,339 posts

202 months

Wednesday 1st April 2015
quotequote all
pmanson said:
As I have a car allowance through work I do the following:

Claim 18p ppm on my work expenses

Claim the tax back on the difference between the allowable rate (45p) and the rate i'm paid. As a 40% taxpayer it adds up quite nicely.

Typically I end up with a small cheque and a change to my tax code each year


Are you sure they don't pay for business mileage? Commuting I could understand (eg. Home to standard place of work) but not to pay anything is a bit odd. I'm not sure how you'd go about claiming it back.
I get a company car which is partially funded by work, and then topped up by me so I can get something better than a Twizzy wink

I get 25p/m back from my employer for business milage.

Does this mean I can claim the difference between that and 45p from HMRC? I assumed the lower rate was because they were providing me with a car, and that I could get no further tax relief...

pmanson

13,382 posts

253 months

Wednesday 1st April 2015
quotequote all
Pheo said:
I get a company car which is partially funded by work, and then topped up by me so I can get something better than a Twizzy wink

I get 25p/m back from my employer for business milage.

Does this mean I can claim the difference between that and 45p from HMRC? I assumed the lower rate was because they were providing me with a car, and that I could get no further tax relief...
Say you did 10,000 miles. You claim via work would be .25p x 10k = £2,500. What the government will allow you to claim is £4,500 (45ppm). On the £2k difference you can claim the tax back on this (£400/£800 dependent on tax level).

Claimable rates drop once you hit a certain threshold but it's pretty straightforward to do it. From memory as long as the claim is less than £2,500 you can do this without doing a tax return.

Pheo

3,339 posts

202 months

Wednesday 1st April 2015
quotequote all
pmanson said:
Say you did 10,000 miles. You claim via work would be .25p x 10k = £2,500. What the government will allow you to claim is £4,500 (45ppm). On the £2k difference you can claim the tax back on this (£400/£800 dependent on tax level).

Claimable rates drop once you hit a certain threshold but it's pretty straightforward to do it. From memory as long as the claim is less than £2,500 you can do this without doing a tax return.
Excellent - I've probably got a couple of thousand miles easily owed to me (which should balance out the underpayment cos my company forgot to tell them about the company car for 6 months!!!)

Pheo

3,339 posts

202 months

Wednesday 1st April 2015
quotequote all
pmanson said:
Say you did 10,000 miles. You claim via work would be .25p x 10k = £2,500. What the government will allow you to claim is £4,500 (45ppm). On the £2k difference you can claim the tax back on this (£400/£800 dependent on tax level).

Claimable rates drop once you hit a certain threshold but it's pretty straightforward to do it. From memory as long as the claim is less than £2,500 you can do this without doing a tax return.
Interesting, from form P87:

[Quote]If you pay for fuel whilst using a company vehicle for business journeys you can claim for the actual cost of business fuel but only if any amount reimbursed by your employer is less than your actual business fuel cost. The calculation of your claim must use your actual fuel costs and not any set mileage rates published by us or any other organisation. Please attach a summary of your calculation with any claim. The mileage rates in the section 'Vehicles and expenses of using your own vehicle for work' are designed to cover the total cost of using your own vehicle; you cannot claim any further general motor expenses such as MOT, tyres, etc
Wondering if anyone has successfully claimed or not for this - it seems I can't use their 45PPM figure as that includes maintenance I don't pay

Teddye4687

Original Poster:

377 posts

148 months

Wednesday 1st April 2015
quotequote all
From what I understand, and though this is now moving away from my original question, company car users can only claim back for the fuel, which is a much lower rate @ £0.20 (for a 2 litre+ engine, link below shows other engine sizes)

So if your employer is paying you £0.20 for business mileage, you can't claim anything more. If they were paying you £0.25 per mile, you'd have to pay tax on the difference as it's classed as an income. If your employer paid you £0.15, you can claim relief on the difference.

https://www.gov.uk/government/publications/advisor...

I'm still nonethewiser on my original question though, so advice most welcome...

Edited by Teddye4687 on Wednesday 1st April 15:49

PurpleMoonlight

22,362 posts

157 months

Wednesday 1st April 2015
quotequote all
Teddye4687 said:
I'm still nonethewiser on my original question though, so advice most welcome...

Edited by Teddye4687 on Wednesday 1st April 15:49
You claim tax relief on 45p per mile, so get back £9 in your example.

Teddye4687

Original Poster:

377 posts

148 months

Wednesday 1st April 2015
quotequote all
I just always assumed the £0.45 was the employer effectively claiming the tax back and passing this on without the employee having to go through HMRC. I didn't know they were actually taking the hit themselves.

£0.09 per mile doesn't even cover the petrol. Are there means to claim back all the other expenses of using a private vehicle for business use, i.e. running costs? Bear in mind, there's no car allowance etc

PurpleMoonlight

22,362 posts

157 months

Wednesday 1st April 2015
quotequote all
Teddye4687 said:
Are there means to claim back all the other expenses of using a private vehicle for business use, i.e. running costs? Bear in mind, there's no car allowance etc
Yes, find a decent employer.

Keep decent records of your mileage too. HMRC may require proof.

PurpleMoonlight

22,362 posts

157 months

Wednesday 1st April 2015
quotequote all
And make sure your insurance covers you for business use.

Mattt

16,661 posts

218 months

Wednesday 1st April 2015
quotequote all
Teddye4687 said:
I just always assumed the £0.45 was the employer effectively claiming the tax back and passing this on without the employee having to go through HMRC. I didn't know they were actually taking the hit themselves.

£0.09 per mile doesn't even cover the petrol. Are there means to claim back all the other expenses of using a private vehicle for business use, i.e. running costs? Bear in mind, there's no car allowance etc
Covering the other costs is why your employer should be paying you more than zero, how many miles are you doing?

Sheepshanks

32,749 posts

119 months

Wednesday 1st April 2015
quotequote all
Teddye4687 said:
I'm looking into it and keep interpreting it as 'tax relief', which would mean I claim back the tax paid on £45, meaning I only get £9 (£45 * 20%)

Am I missing something here?!
No, you're not missing anything. You're correct.

Eric Mc

121,994 posts

265 months

Wednesday 1st April 2015
quotequote all
If your employer does not pay you any mileage when you use your personal car for work related travel, then you can make the 45p per mile claim from HMRC.

So, if you drove 2,000 miles in a tax year as part of your employment, you could make a tax relief claim of £900.00(2,000 miles @ 45p)

However, HMRC will not refund you £900.00. They will deduct the £900.00 from your taxable income for the year and refund to you the tax saving you are entitled to. As you are a basic rate taxpayer, the amount of tax refund you would get would be £180.00 i.e. £900.00 @ 20%. If you were a higher rate taxpayer the tax refund would be £360.00.

There are a couple of things you need to be aware of

i) the 45p per mile rate only covers the first 10,000 business miles. You can only claim 25p per mile for business miles above 10,000.

ii) travel to and from your normal place of work (the "commute") is not claimable.

andy-xr

13,204 posts

204 months

Wednesday 1st April 2015
quotequote all
Teddye4687 said:
There are no expenses etc factored into the salary, no car allowance etc. There is a pool car, but this is often used by other employees which requires us to use our own vehicles at times. They don't reimburse any travel expenses (that's not a problem, I just need to understand what I can reclaim)
That'd be a problem for me, I dont do many miles any more but my theory is if you want me to go see customers, it costs money and I aint paying that out of my own pocket. As to the answer, you'd claim 45ppm relief on the first 10k miles.

Edited by andy-xr on Wednesday 1st April 17:26

mike9009

6,999 posts

243 months

Wednesday 1st April 2015
quotequote all
Hi

I am recently getting into these realms. I am a higher rate tax payer. My new company require us to use our personal cars for business use (not too many miles, maybe 2000 per annum)

I put in an expenses form and get reimbursed 45ppm. Do I need to do anything for the taxman? Reading the above, I suspect I don't. If I do is there a simple guide somewhere?

Thanks

Sorry for the hijack!

Mike