Tax code - Mileage

[Shotgun Jon]

Hi

I've just started a new job and my tax code has reduced to 1080L to recover tax that I owe.

HMRC are saying it's because of mileage expenses that have been paid to me because I have used my personal car for business. It's true to say I have but I've done no more than 500 miles max in the year.

Surely it's not right that I claim 45p per mile back for mileage and it's then classed as taxable??? Is this right and am I just stuck with it?

I've read that I can also get tax relief on this? If that's the case why bloody charge it in the first place.

Thanks in advance!

Cheers

[bogie]

Usually if you get our petrol paid in cash, this is added as taxable pay, then you claim back tax relieft at 45p a mile in your tax return

If you get paid a mileage rate from work of say 25p a mile then this is tax free. Your employer could pay you up to 45p a mile tax free, so then you claim back tax relief on the difference (another 20p)

If HMRC are allowing for future mileage driven of say 500 miles a year at 45p a mile, thats only £225, your tax code would be going UP by £225 not down

If your code has gone down then maybe HMRC are trying to recover some underpaid tax.

All the workings out are on the coding notice that you should have been sent from HMRC. Or available online if you a registered, you do your tax return online, view and amend online.....thats how I do mine anyway.

[RacingPete]

Does the tax code make a difference in the long run? If you do a tax return then surely it all comes out in the self assessment wash?

[Shotgun Jon]

Hi

Thanks for that. I don't do a self assessment. Just a normal local authority employee. This has only just come to light as I've swapped jobs.

I just do about 40 miles a month and then claim back 45ppm in expenses. That's it.

Perhaps I need to log one.

Cheers

[quinny100]

Are you sure you're only getting 45p per mile?

Local Government mileage rates for casual users have been 65p a mile since 2010 for vehicles over 1200cc. https://www.unison.org.uk/content/uploads/2016/07/...

Some councils have switched to paying HMRC rates to cut costs over the last few years but I bet many still pay the union-negotiated rate.

If you're getting over 45p this is normal and you should also have had a P11D with your P60 for the year showing how much tax is due.

[rattyuk2000]

Most likely prior employer has declared your mileage claims as BIK taxable on your P45, and this has triggered HMRC to make the adjustment.