clarification car allowance

[sdyson31]

Hi,

Just want to get some clarification on car allowance. Company is offering £400 a month car allowance which i believe is before tax and would be £4800 per year.

As far as my understanding is, A car allowance is just additional salary so is taxed just like normal salary. If i do any business mileage then i would be able to claim something on business mileage from HRMC.

What i like to know if i can use car allowance on personal mileage like travelling to work?

Edited by sdyson31 on Saturday 23 April 11:51

Edited by sdyson31 on Saturday 23 April 15:36

[sdyson31]

Countdown said:

Nope. Commuting to and from a permanent place of work is not a valid business expense.

I am not asking to claim something on personal mileage. I believe car allowance is just like a cash and i can spend whereever i want.

This is what i have been told by HR so far;

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The car allowance payment would be £400 per month- which is paid as an addition to any salary and is taxable as such.

It is then the member of staffs responsibility to fill in an expense form against business miles travelled to recoup directly from HMRC each month for fuel use and wear and tear on their vehicle at a set rate by the government.

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Edited by sdyson31 on Saturday 23 April 12:01

[sdyson31]

LC23 said:

A car allowance is just extra cash to spend as you wish. It seems your Company are saying they are providing you with this cash allowance to cover your motoring costs and they do not allow you to also claim the HMRC rates for business mileage from them?

If so you can still make a claim for this amount from HMRC which effectively reduces your taxable income by the amount claimed so you receive the tax relief on this.

I am not much worry about business mileage as i won't be doing any business traveling. I will be traveling 100 miles each day and wanted to get an idea if this would cover my petrol cost.