Fuel Expenses - no employer mileage allowance
Discussion
I may, soon, be required to do work from a different office (customer site). This is in my best interest and it's therefore unlikely that my employer will be keen on paying my fuel expenses (although this would be my opening gambit) in fact it would probably go more in my favour if it doesn't cost the Account Manager fuel expenses.
I see on the HMRC website that I could claim tax relief on mileage upto 10,000 miles @40p and anything over @25p.
My commute to the current office is 12 miles, the rest of the journey to the customer site is 33 miles (double this for the return journey of course!). If my employer didn't pay a mileage allowance then how would it work with my claim from HMRC? I don't really understand how it works and what I effectively get in my pocket at the end of the month.
Thanks for the help/advice
I see on the HMRC website that I could claim tax relief on mileage upto 10,000 miles @40p and anything over @25p.
My commute to the current office is 12 miles, the rest of the journey to the customer site is 33 miles (double this for the return journey of course!). If my employer didn't pay a mileage allowance then how would it work with my claim from HMRC? I don't really understand how it works and what I effectively get in my pocket at the end of the month.
Thanks for the help/advice
Pretty sure the relief went upto 45p for the first 10k miles.
In my experience most employers will pay you travelling expenses for a defined period should your place of work change.
With regards to HMRC you keep a record of the mileage and you include it in your tax return and is offset against your tax due.
In my experience most employers will pay you travelling expenses for a defined period should your place of work change.
With regards to HMRC you keep a record of the mileage and you include it in your tax return and is offset against your tax due.
MagicalTrevor said:
Thanks. So lets say that I'm doing 10k business miles per year, does that effectively give me £4000 in my pocket regardless of whether my employer pays 0p, 16p or even 45p per mile?
Only if your employer doesn't doesn't pay mileage. If your employer pays less than the 45p that HMRC allow, you can claim back the difference.That's right. You claim back the tax on the difference.
So if you did 10,000 miles, that would be deemed to have cost you £4,500 (45 ppm x 10,000 miles). That £4,500 can come out of gross income rather than net so the tax you have paid on that gross amount can be refunded at your marginal rate.
If you are a 40% taxpayer, that would be 40% x £4,500 = £1,800 tax refund due.
So if you did 10,000 miles, that would be deemed to have cost you £4,500 (45 ppm x 10,000 miles). That £4,500 can come out of gross income rather than net so the tax you have paid on that gross amount can be refunded at your marginal rate.
If you are a 40% taxpayer, that would be 40% x £4,500 = £1,800 tax refund due.
Zigster said:
That's right. You claim back the tax on the difference.
So if you did 10,000 miles, that would be deemed to have cost you £4,500 (45 ppm x 10,000 miles). That £4,500 can come out of gross income rather than net so the tax you have paid on that gross amount can be refunded at your marginal rate.
If you are a 40% taxpayer, that would be 40% x £4,500 = £1,800 tax refund due.
Perfect thanks! So worst case scenario, my employer does not pay mileage and the fuel costs me £2000 per year then I effectively get £1800 tax back and I'm only out of pocket by £200.So if you did 10,000 miles, that would be deemed to have cost you £4,500 (45 ppm x 10,000 miles). That £4,500 can come out of gross income rather than net so the tax you have paid on that gross amount can be refunded at your marginal rate.
If you are a 40% taxpayer, that would be 40% x £4,500 = £1,800 tax refund due.
Best case is my employer pays fuel (our rate is 16p) and I claim the difference.
Cheers guys
that answered my questionBear in mind for HMRC purposes you can claim from home to the customer site, even if you call in at your normal office on the way, as long as the stop is incidental to the journey - ie to pick up documents etc.
If you get a mileage allowance from your employer they'll probably only pay you from your office to the customer site.
How often will you be doing this? That daily mileage will soon add up and I'd be hoping for more than petrol money.
If you get a mileage allowance from your employer they'll probably only pay you from your office to the customer site.
How often will you be doing this? That daily mileage will soon add up and I'd be hoping for more than petrol money.
Just a quick question regarding this.
5 years ago I had to move site to help out my company and in return they agreed to pay me the difference between travelling to site 1 from home and travelling to store 2 from home. This equates to 60 miles a day. The overall commute is approx. 100 miles day with me paying for the 40 mile short fall.
For the past four years the company rate was 30p per mile, and have raised it to 35p per mile this financial year.
I was not aware that I could claim the tax back on the difference until seeing this.
I am not self employed and all of my tax and NI contributions are deducted at source. I also do not self assess. Does this make a difference to me?
Can I back claim at all or is it only for the current financial year?
Any help would be appreciated. Thanks.
Should add, I do approximately 20,000 miles per year.
5 years ago I had to move site to help out my company and in return they agreed to pay me the difference between travelling to site 1 from home and travelling to store 2 from home. This equates to 60 miles a day. The overall commute is approx. 100 miles day with me paying for the 40 mile short fall.
For the past four years the company rate was 30p per mile, and have raised it to 35p per mile this financial year.
I was not aware that I could claim the tax back on the difference until seeing this.
I am not self employed and all of my tax and NI contributions are deducted at source. I also do not self assess. Does this make a difference to me?
Can I back claim at all or is it only for the current financial year?
Any help would be appreciated. Thanks.
Should add, I do approximately 20,000 miles per year.
http://www.hmrc.gov.uk/rates/travel.htm
Have just found this. I see that they pay upto 45p for the first 10,000 miles, but then reduce that to 25p for anything over that.
Does this mean that as I receive 35p per mile for every mile from the company I work for, I am effectively breaking even and should just leave this alone?
Have just found this. I see that they pay upto 45p for the first 10,000 miles, but then reduce that to 25p for anything over that.
Does this mean that as I receive 35p per mile for every mile from the company I work for, I am effectively breaking even and should just leave this alone?
MagicalTrevor said:
Thanks. So lets say that I'm doing 10k business miles per year, does that effectively give me £4000 in my pocket regardless of whether my employer pays 0p, 16p or even 45p per mile?
No.Example.
Your employer pays you NOTHING for mileage (mean sod).
You do 10,000 work related miles.
You can make a claim of up to 45p per mile.
This equates to a claim of £4,500.
You are a basic rate taxpayer.
The £4,500 claim will reduce your overall tax bill for teh year by £900 (£4,500 x 20%)
If you are a higher rate taxpayer, the reduction in your tax bill becaome £1,800 (£4,500 x 40%)
If the emplyer paid you 16p per mile, your mileage claim from HMRC would be based on 29p per mile (45p minus 16p).
fidzer said:
http://www.hmrc.gov.uk/rates/travel.htm
Have just found this. I see that they pay upto 45p for the first 10,000 miles, but then reduce that to 25p for anything over that.
Does this mean that as I receive 35p per mile for every mile from the company I work for, I am effectively breaking even and should just leave this alone?
There is nothing wrong with making a claim you are fully entitled to. Indeed, HMRC are keeen that people pay the RIGHT tax. This isn't a wild tax avoidance scheme. This is just using the allowances HMRC are keen for you to use.Have just found this. I see that they pay upto 45p for the first 10,000 miles, but then reduce that to 25p for anything over that.
Does this mean that as I receive 35p per mile for every mile from the company I work for, I am effectively breaking even and should just leave this alone?
The important things are that -
the mileage is genuine
the mileage relates to allowable travel (i.e. does not include "the normal commute")
you have adequate records to support the claim if asked to prove it
Defining what is "the normal commute" can be a bit difficult.
The basic rule is that no claim can be made for the "normal commute".
If you are temporarilly assigned to (say) a client that is further than "the normal commute", HMRC will allow you to claim the extra distance you have to travel to get to that place.
If the distance is shorter, then no claim can be made if you drive there direct.
If you drive there via the normal place of work, then you can, of course, make a claim for the trip from the normal office to the client.
The basic rule is that no claim can be made for the "normal commute".
If you are temporarilly assigned to (say) a client that is further than "the normal commute", HMRC will allow you to claim the extra distance you have to travel to get to that place.
If the distance is shorter, then no claim can be made if you drive there direct.
If you drive there via the normal place of work, then you can, of course, make a claim for the trip from the normal office to the client.
this is a common issue in my line of work in construction, I am a quantity surveyor, I am elected the main head office as my place of work. so any journeys to and from there to my house are classed as normal commuting and subject to tax on any mileage payments from my employer.
any travel to a temporary place of work (can't be based there for anything up to 2 years, but not my main office) which could be a construction site that I work on, can be claimed from my employer at whatever rate they want to pay. hmrc allow up to 45p per mile tax free (1st 10k), and any difference betwee what your employer pays and the hmrc allowance can be claimed back at the end of the financial year. I think up to 3 years back can be claimed, speak to hmrc and get them to send you a P87 form out to do this.
remember tho, hmrc don't like giving out money, the if you do get a rebate, they will want to adjust your tax code! make sure they don't or you get them to change it back straight away as this can mess up your paye for years!!!
any travel to a temporary place of work (can't be based there for anything up to 2 years, but not my main office) which could be a construction site that I work on, can be claimed from my employer at whatever rate they want to pay. hmrc allow up to 45p per mile tax free (1st 10k), and any difference betwee what your employer pays and the hmrc allowance can be claimed back at the end of the financial year. I think up to 3 years back can be claimed, speak to hmrc and get them to send you a P87 form out to do this.
remember tho, hmrc don't like giving out money, the if you do get a rebate, they will want to adjust your tax code! make sure they don't or you get them to change it back straight away as this can mess up your paye for years!!!
Eric Mc said:
If you are temporarilly assigned to (say) a client that is further than "the normal commute", HMRC will allow you to claim the extra distance you have to travel to get to that place.
If the distance is shorter, then no claim can be made if you drive there direct.
For one-off journeys you can claim, for tax purposes, the mileage from home. If the distance is shorter, then no claim can be made if you drive there direct.
What I'm not sure about is the temporary workplace situation - I think, for tax purposes, you can claim the whole journey, but there's a 2 year limit and then it becomes your permanent workplace.
For example: http://www.hmrc.gov.uk/manuals/eimanual/EIM32081.h...
The employer can set their own rules. Indeed HMRC, as an employer, only pays its own staff any additional mileage above the normal commute.
There's even an example buried in here somewhere which talks about calling in at your office on the way and the whole journey still counts.
http://www.hmrc.gov.uk/manuals/eimanual/EIM32000.h...
There did used to be a rule about only claiming the additional distance but it changed some years ago.
Edited by Deva Link on Friday 14th December 10:54
Thanks for all the informative replies.
I do indeed travel direct to my place of work from home so I believe this would be classed as my normal commute and not be eligible to claim against.
Providing evidence for the claims would not be a problem if needed as an employee expense form has to be submitted along with a fuel receipt signed and dated by myself. I'm certain these would be held at our head office, and if anything like any other documents they store, will be kept for up to six years.
I also wasn't aware of the rule of anything over 2 years being classed as being recognised as a permanent place of work. Thanks for that.
It would be nice to try and get something back from HMRC as in all of my working life I have never received a tax rebate in any form and only just recently got landed with a bill for £600 last month for an overpayment of tax credits.
This was due to me being paid for overtime worked that normally would be given as time back , and this pushed my wife and I over the earnings threshold for being eligible for the tax credits. Was not a nice feeling reading that letter, especially when they were effectively wanting it paid back within 28 days, just before Christmas!
I do indeed travel direct to my place of work from home so I believe this would be classed as my normal commute and not be eligible to claim against.
Providing evidence for the claims would not be a problem if needed as an employee expense form has to be submitted along with a fuel receipt signed and dated by myself. I'm certain these would be held at our head office, and if anything like any other documents they store, will be kept for up to six years.
I also wasn't aware of the rule of anything over 2 years being classed as being recognised as a permanent place of work. Thanks for that.
It would be nice to try and get something back from HMRC as in all of my working life I have never received a tax rebate in any form and only just recently got landed with a bill for £600 last month for an overpayment of tax credits.
This was due to me being paid for overtime worked that normally would be given as time back , and this pushed my wife and I over the earnings threshold for being eligible for the tax credits. Was not a nice feeling reading that letter, especially when they were effectively wanting it paid back within 28 days, just before Christmas!
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