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.

[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

[audi321]

Vee said:

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

No I'm afraid not.