Business mileage in private car - tax allowance

[clive993]

Not sure if we have any tax gurus on here, but I have a question re business mileage in my car

I currently have and will continue to get a car allowance which is paid as salary and taxed. However at the moment I get a fuel card that pays for private and business mileage. So I pay 40% tax on everything that goes on the card and claim back 40p for every business mile in tax relief.

However times are tough and my business are now going to take the card, we will be expected to cover private mileage and they will pay 12p (dont laugh) for every business mile in expenses.

My question is this.... given all the above and in effect the car is owned by me, will i still be able to claim the tax relief of 40p per BUSINESS mile LESS the 12p that my business pays me. SO in effect I get tax relief of 28p per mile which cash in hand is 40% of that 28p. Ok even I am getting confused now.

Tax... dont you just love it ! Any one that knows the answer then do let me know, before I go in to battle with the company !!

[Eric Mc]

You are correct.

You can make a claim for the shortfall between what your employer is paying you (12p per mile) and the HMRC allowed rate (40p per mile).

Obviously, you only get the 28p difference tax relief at your highest rate of tax.

[aclivity]

Eric Mc said:

You are correct.

You can make a claim for the shortfall between what your employer is paying you (12p per mile) and the HMRC allowed rate (40p per mile).

Obviously, you only get the 28p difference tax relief at your highest rate of tax.

for the first 10,000 miles of business use, you can claim tax relief on the difference between 12p and 40p; after 10,000 miles you claim the difference between 12p and 25p.

from personal experience, it is a good idea to keep a log of the journeys that you make, as HMRC can ask for evidence. I had a spreadsheet with every mile / journey logged, which they were happy with.

[MATTP77]

aclivity said:

for the first 10,000 miles of business use, you can claim tax relief on the difference between 12p and 40p; after 10,000 miles you claim the difference between 12p and 25p.

from personal experience, it is a good idea to keep a log of the journeys that you make, as HMRC can ask for evidence. I had a spreadsheet with every mile / journey logged, which they were happy with.

Yea, first 10,000 miles you receive 40p, and thereafter 25p. I am yet to start doing this, which is REALLY annoying as i have been working 275+ miles from home for the last 3 years!:@

I am told you can claim backdated mileage, although should HMRC 'come a knockin' then you obviously will have to be able to prove receipts.

This - sucks.

edit: Just reading the end of your post there.... I too have all of my BUSINESS miles logged, as it was a requirement for my "expense claims" for payment of business miles. On this basis, am i entitled to apply for relief on 3 years worth of business miles?!?! :O

Edited by MATTP77 on Tuesday 8th February 13:00

[Eric Mc]

Yes - do it.

[MoonMonkey]

I've been claiming tax relief for the last few years and it's definately worth it. Recently completed my tax return on-line for 2009/2010 and am owed £950..!!

As has been said make sure you keep records of where you've been (full address and postcode), miles, summary of route taken etc... I was quizzed a few times why I hadn't taken a more direct route as they will check on google maps..!!

[anonymous-user]

There was an article in various Newspaper last week, that was saying the AA calculated the claimable 40p a mile was somewhat out of date

http://www.telegraph.co.uk/motoring/news/8289038/T...

[Eric Mc]

It is.

It's been the standard rate for about 10 years.

[Eric Mc]

Are you using your own car?

[Eric Mc]

And does the company pay for ALL your fuel? Do you make any contribution for the fuel you use for non-busines related journeys?

[Eric Mc]

I would think then that there is no scope for a 40p per mile claim in your situation.

In fact, I would think that you should be charged a Benefit in Kind based on the fact that the company is paying for your fuel. However, the overall level of the Benefit in Kind charge wiould be mitigated by the annual value of the contribution you make for that fuel i.e. £80 x 12)

Do you have any adjustment to your PAYE Coding in respect of a Fuel Benefit?

Have you clarified with your employer the tax treatment of the current arrangements?

[Eric Mc]

I hadn't noticed that.

[sixspeed]

MATTP77 said:

Yea, first 10,000 miles you receive 40p, and thereafter 25p. I am yet to start doing this, which is REALLY annoying as i have been working 275+ miles from home for the last 3 years!:@

Edited by MATTP77 on Tuesday 8th February 13:00

You should know that you can only claim "business mileage" as long as the destination is not deemed your usual place of work. HMRC use a 2-year rule to determine this, so if you are working at the same location for longer than 2 years it is deemed your place of work, and business mileage expenses against travel to that location are no longer allowed to be claimed.

[MATTP77]

sixspeed said:

You should know that you can only claim "business mileage" as long as the destination is not deemed your usual place of work. HMRC use a 2-year rule to determine this, so if you are working at the same location for longer than 2 years it is deemed your place of work, and business mileage expenses against travel to that location are no longer allowed to be claimed.

I have been made aware of that before, and the same applies for taxable mobility allowance whilst working away from home. After 2 years, your "temporary place of work" become permanent in HMRC's eyes, your tax free mobility allowance/living away allowance becomes taxed.

I have no receipts for my miles, just a logged account with my employer which i have access to - which is all the proof i have. Is this definitely enough to justify tax relief?

i dont want to be quizzed about it!

[Eric Mc]

Mileage logs are usually the proof needeed if claiming a mileage based allowance.

[MoonMonkey]

MATTP77 said:

I have been made aware of that before, and the same applies for taxable mobility allowance whilst working away from home. After 2 years, your "temporary place of work" become permanent in HMRC's eyes, your tax free mobility allowance/living away allowance becomes taxed.

I have no receipts for my miles, just a logged account with my employer which i have access to - which is all the proof i have. Is this definitely enough to justify tax relief?

i dont want to be quizzed about it!

When I first claimed tax relief for mileage I was quizzed so make sure you have the necessary info. I was asked to provide:

Mileage log (keep that anyway) but it had to incl full address, postcode and reason for the visit.
Contract of employment
Staement that this wasn't my permananet place of work etc
Evidence that I used my own car incl copies of MOT certs, service history etc, purchase receipts etc

[dave9]

i know someone that gets 42p per mile on all mileage in his private car. shouldn't he be paying a bit of tax on the first 10,000 miles (ie tax on the 2p) and then over 10k miles a fair bit of tax?

[Eric Mc]

Yes.

[rfisher]

I commute 12,000 miles a year from my home to my place of work.

I don't claim anything for this travel but I do claim if I have to travel from my place of work to another base and back to my place of work.

My employer pays these costs free of tax.

Should / could I claim for my commuting costs as well?

[Eric Mc]

The costs of the "normal commute" is not claimable for tax purposes.