Car Allowance, Company Fuel Rate - What am I Owed?!

[FordMan1]

This question has inevitably been asked a million times but I never feel a comprehensive answer has been provided from reviewing other posts.

I work for a company as a permanent member of staff. I am paid a car allowance along with my salary on a monthly basis.

I took the car allowance sum, after tax, and used it for a personal lease. I lease a vehicle which I now have insured for business purposes and use for business.

When using the car for work, I am paid a mileage rate of (recently amended), 11p per mile.

This is the multi million dollar question -

Is this car considered "personal" and therefore can I claim back the 34p for the first 10,000 miles.

Or is it as the firm would have me believe, a business car, and therefore I can only claim back the VAT on the difference, ie roughly 7p per mile?

A reasoned response from someone in the know would be most helpful.

Regards.

Malcolm

[FordMan1]

Right,

I think I am therefore right in saying from reading all the responses above that I am within my rights to claim back the relief at 20% for my business mileage completed in the last year so rough man maths, 7p x 7,000 business miles covered, resulting in a "payment" of £490.00

Is there any way that the company could be "Claiming" this difference for me at source before paying my salary each month as this has also been suggested?

[FordMan1]

Eric Mc said:

Do it yourself. Don't rely on your employer or HMRC sorting it out for you.

For tax year 2014/15, how many business miles did you do and how much was paid to you (actual total - not pence per mile) by your employer?

Are you a basic rate taxpayer or do you pay some tax at the higher rate?

I will do it myself, however I am wondering if it is possible that it has already been "paid" and therefore I would not be elligible.

I did 7,400 miles for the period 2014/2015 and working that out aint too simple as it would be paid as combined expenses payments via cheque.

I am a basis rate payer and pay nothing at the higher rate.

[FordMan1]

Eric Mc said:

FordMan1 said:

I will do it myself, however I am wondering if it is possible that it has already been "paid" and therefore I would not be elligible.

I did 7,400 miles for the period 2014/2015 and working that out aint too simple as it would be paid as combined expenses payments via cheque.

I am a basis rate payer and pay nothing at the higher rate.

7,400 miles at 45p per mile means that you could have been paid up to £3,330 by your employer (7,400 @ 45p) without you being taxed. As they only paid you 11p per mile, they will have paid you only £814 in total (7,400 @ 11p). This means you could make a claim for the missing £2,516.

However, HMRC will not refund you £2,516. They will allow you to make a tax relief claim of £2,516.

If you pay tax at 20%, this means they will refund you £503.20 (£2,516 x 20%).

If you pay tax at 40%, this means they will refund you £1,006.40 (£2,516 x 40%).

You can make the claim in two ways.

You could request that you sign up for Self Assessment and complete and submit a Self Assessment tax return for 2014/15.

Alternatively, you can complete and submit an HMRC form P87. However, there is an upper limit of £2,500 for claims using a P87. So, in theory, to claim £2,516 calculated above you would have no choice but to voluntarilly register for Self Assessment.

However, the expedient thing to do would be to claim just under the £2,500 level and complete a P87.

Keep an eye on the differential each year as your employer is being extremely mean. 11p a mile is way too low for a person who has to use their own personal car extensively for work related journeys.

Very helpful, thank you!

I have filled out and signed the form in the last hour having printed all previous mileage submission forms so hopefully it gets sorted relatively quickly.

Work are still adamant that they are claiming it back at source. Every month my car allowance sum on payslip does adjust slightly and a seperate column is added called expenses which when you add the two together, comes to my gross allowance a month of £250. I find this weird and have no particular explanation.

Car allowance doesnt cover the most basic form of car the firm would previously have given the employee, however that is for another time!

[FordMan1]

2 sMoKiN bArReLs said:

Exactly

What are these gents and I will supply them if is helps with the advice?

Unfortunately I have moved employers and therfore have no previous records of mileage, stupidly!

[FordMan1]

Eric Mc said:

Type of car.
Running costs you personally have to meet of the car?

Audi A6 S Line on Personal contract hire, maintenance package including tyres and servicing based on 15k a year mileage for 2 year term.

I am expected to have a car that is serviced, MOT'd if applicable and cover cost of tyres etc.

I trust this assists.

Edited by FordMan1 on Tuesday 21st April 15:42

[FordMan1]

Thanks for all the responses, it is truly pitiful in my opinion, however the company are stuck in the dark ages and unwilling to change.

The old guard cannot see past the "You have a fancy car and we give you cash, what more do you want". A fair car allowance and fuel allowance would be good...

[FordMan1]

thepeoplespal said:

Only real way of dealing with this is to get another job with more money or a better deal. It will cost them loads recruiting another one of you. Might be cutting nose off to spite your face though.

Edited by thepeoplespal on Sunday 26th April 11:12

True, establishing what is a fair car allowance based on grade etc is not the easiest, however lowest rates for a qualified professional in construction or property industry appears to be upwards of £4k a year Gross.