HMRC Tax Relief guide

[DickP]

Hi,

Can anyone point me in the direction of a good guide on how to go about getting / claiming the tax relief for like mileage expenses?

Thanks!

[Eric Mc]

Who do you want to claim the relief from - HMRC or your employer?

Are you an employee?

Are you a sole trader?

Are you the director of your own limited company?

Your "status" determines what set of rules apply to you.

[DickP]

Hi,

I don't understand how I can claim relief via the employer?

I am an employee and this is for example the mileage allowance only being 11ppm but understand I can claim the tax back on the remaining 34ppm I am not paid.

My total work expenses thus far for this tax year exceed £2,500.00.

Thanks,

[megaphone]

https://www.gov.uk/tax-relief-for-employees/vehicl...

Yes you can claim tax relief for the difference between the 45p/m and what you employer gives you. You have to work out wether it is worth it.

Do you already do a self assessment form each year?

[DickP]

Hi,

The car costs roughly 12ppm in fuel alone, so I am otherwise paying to do business miles.

I have never completed a self assessment before.

Thanks,

[Eric Mc]

Does your employer pay mileage to employees who undertake job/work related journeys in their own cars?

[DickP]

Hi

Yes at 11ppm.

Thanks

[Eric Mc]

HMRC allows mileage claims of up to 45p per mile for the first 10,000 work related miles and 25p per mile for mileage above 10,000.

If your employer pays you 11p per mile, you can make a claim, directly to HMRC, for the missing 34p up to 10,000 miles and 14p for miles above 10,000.

You can make the claim via -

self assessment
using your Personal Tax Account
contacting HMRC and telling them

Note that the definition of work related miles can be a bit complicated. You cannot claim for home to work journeys, for instance (the daily commute). You obviously can claim for journeys where you leave your normal place of employment to visit a client/customer/supplier, another office etc etc.
You can also claim for journeys direct from home to work related sites - although that can be a bit more complicated to work out.

And finally, you are claiming "tax relief" on the mileage, not the actual mileage amount.

For example, if you wanted to claim for 5,000 business miles, in your situation you would claim 5,000 @ 34p = £1,700 tax relief. If you are a basic rate taxpayer, that would equate to an actual reduction in your tax liability of £340 (£1,700 @ 20%).
If you are a higher rate taxpayer, the reduction is £680 (£1,700 @ 40%).

[DickP]

Hi,

Thanks but does having claimed over £2,500 in expenses this tax year mean I have to do self assessment to claim the mileage tax relief?

Thanks,

[DickP]

Hi,

Sorry to bump this one but could do with knowing whether the £2,500 expenses limit before self assessment also applies to mileage allowance?

Thanks,

[Countdown]

DickP said:

Hi,

Sorry to bump this one but could do with knowing whether the £2,500 expenses limit before self assessment also applies to mileage allowance?

Thanks,

If you got less than 45ppm you will need to claim tax relief on the difference by submitting a self-assessment tac return.

If you got paid more than 45ppm then it should be reported to HMRC on a P11D by your Employer and they will usuallya djust your tax code for the following tax year

[jonwm]

Doesn't it have to be your own car to do that too? If you get 11p per mile in a company car then you can't claim (as I understand it)

[Countdown]

jonwm said:

Doesn't it have to be your own car to do that too? If you get 11p per mile in a company car then you can't claim (as I understand it)

Yes. If you have a company car then you can only claim the fuel element. Unless you have a company-provided fuel card as well, in which case you can't claim anything.

[Franco5]

Does anyone please know what the situation would be for an employee that gets paid a monthly car allowance in lieu of a company car, runs their own vehicle for business & private use and receives fuel provided free for business & personal use from a company fuel pump at the office? The fuel is taxed as a BIK and there is no mileage allowance paid for business miles. Thanks.

[blank]

Franco5 said:

Does anyone please know what the situation would be for an employee that gets paid a monthly car allowance in lieu of a company car, runs their own vehicle for business & private use and receives fuel provided free for business & personal use from a company fuel pump at the office? The fuel is taxed as a BIK and there is no mileage allowance paid for business miles. Thanks.

Value of fuel is counted as a benefit in kind.

Business miles can be offset at 45p/25p per mile.

[Guv10]

Hi, confused by it all. I have a company car and they pay me per mile according to how many miles I do. Its around 10p per mile.

Can I claim the difference to 45p?

Thanks

[Eric Mc]

No.

The 45p/25p per mile claims are based on you using your own privately owned car for work related journeys.

[martinbiz]

blank said:

Franco5 said:

Does anyone please know what the situation would be for an employee that gets paid a monthly car allowance in lieu of a company car, runs their own vehicle for business & private use and receives fuel provided free for business & personal use from a company fuel pump at the office? The fuel is taxed as a BIK and there is no mileage allowance paid for business miles. Thanks.

Value of fuel is counted as a benefit in kind.

Business miles can be offset at 45p/25p per mile.

Not quite sure what you mean by the last bit, the BIK tax is based on the fact you get all your fuel paid for for both work and private use, the amount of miles done for either is irrelevant. You either receive the free fuel and pay tax on the benefit or you don’t. Years ago the amount of miles covered for business v private use could reduce the BIK tax liability but not any more. IIRC I think you had to do more than 18k business miles to reduce the BIK on the private miles

There is nothing you can offset against it today

Edited by martinbiz on Sunday 27th December 21:51

[blank]

martinbiz said:

blank said:

Franco5 said:

Does anyone please know what the situation would be for an employee that gets paid a monthly car allowance in lieu of a company car, runs their own vehicle for business & private use and receives fuel provided free for business & personal use from a company fuel pump at the office? The fuel is taxed as a BIK and there is no mileage allowance paid for business miles. Thanks.

Value of fuel is counted as a benefit in kind.

Business miles can be offset at 45p/25p per mile.

Not quite sure what you mean by the last bit, the BIK tax is based on the fact you get all your fuel paid for for both work and private use, the amount of miles done for either is irrelevant. You either receive the free fuel and pay tax on the benefit or you don’t. Years ago the amount of miles covered for business v private use could reduce the BIK tax liability but not any more. IIRC I think you had to do more than 18k business miles to reduce the BIK on the private miles

There is nothing you can offset against it today

Edited by martinbiz on Sunday 27th December 21:51

The situation in this case is that there is no mileage allowance paid for business miles. Therefore they can claim tax relief at 45p/25p per mile, as the employer isn't paying them this.

So, while the fuel BIK and business mileage deduction are technically completely unrelated, when doing a tax return you'd effectively offset one against the other.

E.g.
£4k total of fuel used over the year = £4k tax liability.

5,000 business miles = £2,250 tax deduction.

Overall liability £1,750.

Tax to pay is then 20% or whatever of £1,750.



This is how it worked when I did it in 2014 and I can't see anything that has changed since then.

[Sir Bagalot]

If a company I worked for paid me 11ppm to use my own car I'd be asking them to hire me a car when needed.

I would simply use the excuse that you have a limited mileage policy and aren't covered for business use.