Company Car allowance and cost per mile claim - help!
Discussion
I have recently taken a new position where I now get a company car allowance, a fixed amount per month on top of my salary – it’s seen as a perk.
My question is that the company will now only let me claim 12p/mile for fuel, I know there was a thread about this last week and I have signed to increase it, but, someone mentioned that I can claim back the difference of the 12p/mile to the 40p/mile from the government in the form of a tax rebate.
Is this correct?
I am worried that 12p/mile will not cover my fuel!
My question is that the company will now only let me claim 12p/mile for fuel, I know there was a thread about this last week and I have signed to increase it, but, someone mentioned that I can claim back the difference of the 12p/mile to the 40p/mile from the government in the form of a tax rebate.
Is this correct?
I am worried that 12p/mile will not cover my fuel!
Extra 300 Driver said:
I have recently taken a new position where I now get a company car allowance, a fixed amount per month on top of my salary – it’s seen as a perk.
My question is that the company will now only let me claim 12p/mile for fuel, I know there was a thread about this last week and I have signed to increase it, but, someone mentioned that I can claim back the difference of the 12p/mile to the 40p/mile from the government in the form of a tax rebate.
Is this correct?
I am worried that 12p/mile will not cover my fuel!
You can get a rebate though I'm unsure how to do this - perhaps someone more knowledgeable can explain.My question is that the company will now only let me claim 12p/mile for fuel, I know there was a thread about this last week and I have signed to increase it, but, someone mentioned that I can claim back the difference of the 12p/mile to the 40p/mile from the government in the form of a tax rebate.
Is this correct?
I am worried that 12p/mile will not cover my fuel!
12p/mile is supposed to cover your fuel and the allowance covers your vehicle maintence. Even on my 45mpg Mondeo it costs more than 12p per mile though...
JCB123 said:
Company milaege is usually 30p - 35p/mile....I thought?!
If you aren't getting an allowance.Edited by justlivyalife on Friday 6th June 13:06
I've recently fallen into this one! I had a company car then gave it up. I get £400/month car allowance plus 12p/mile for fuel. This mileage allowance pays for 1/2 the actual fuel cost!
I believe that it is possible to claim back the difference between the 12p/mile and the government 40/p guidline amount if you use your own car for business, but I'm not sure if this is the case if you are also being paid a car allowance?
I believe that it is possible to claim back the difference between the 12p/mile and the government 40/p guidline amount if you use your own car for business, but I'm not sure if this is the case if you are also being paid a car allowance?
You get a base rate per mile - 12p in your case - but you can claim 40p a mile in tax relief (up to 10k miles)
To do this, fill in a P87 - http://www.hmrc.gov.uk/mileage/index.htm and send it to your local HMRC office.
You will then be credited back for each financial year, either in a payment or tax code adjustment.
HTH
To do this, fill in a P87 - http://www.hmrc.gov.uk/mileage/index.htm and send it to your local HMRC office.
You will then be credited back for each financial year, either in a payment or tax code adjustment.
HTH
Poledriver said:
I've recently fallen into this one! I had a company car then gave it up. I get £400/month car allowance plus 12p/mile for fuel. This mileage allowance pays for 1/2 the actual fuel cost!
I believe that it is possible to claim back the difference between the 12p/mile and the government 40/p guidline amount if you use your own car for business, but I'm not sure if this is the case if you are also being paid a car allowance?
Yes, you can claim it if you're on a car allowance. I believe that it is possible to claim back the difference between the 12p/mile and the government 40/p guidline amount if you use your own car for business, but I'm not sure if this is the case if you are also being paid a car allowance?
Muzzer said:
You get a base rate per mile - 12p in your case - but you can claim 40p a mile in tax relief (up to 10k miles)
To do this, fill in a P87 - http://www.hmrc.gov.uk/mileage/index.htm and send it to your local HMRC office.
You will then be credited back for each financial year, either in a payment or tax code adjustment.
HTH
Thats great! Top man!To do this, fill in a P87 - http://www.hmrc.gov.uk/mileage/index.htm and send it to your local HMRC office.
You will then be credited back for each financial year, either in a payment or tax code adjustment.
HTH
Extra 300 Driver said:
Muzzer said:
You get a base rate per mile - 12p in your case - but you can claim 40p a mile in tax relief (up to 10k miles)
To do this, fill in a P87 - http://www.hmrc.gov.uk/mileage/index.htm and send it to your local HMRC office.
You will then be credited back for each financial year, either in a payment or tax code adjustment.
HTH
Thats great! Top man!To do this, fill in a P87 - http://www.hmrc.gov.uk/mileage/index.htm and send it to your local HMRC office.
You will then be credited back for each financial year, either in a payment or tax code adjustment.
HTH
By the way - 12p a mile is daylight robbery in these £1.29 a litre times.
My company makes Arkwright look generous and even we get 15p per mile...
Muzzer said:
Poledriver said:
I've recently fallen into this one! I had a company car then gave it up. I get £400/month car allowance plus 12p/mile for fuel. This mileage allowance pays for 1/2 the actual fuel cost!
I believe that it is possible to claim back the difference between the 12p/mile and the government 40/p guidline amount if you use your own car for business, but I'm not sure if this is the case if you are also being paid a car allowance?
Yes, you can claim it if you're on a car allowance. I believe that it is possible to claim back the difference between the 12p/mile and the government 40/p guidline amount if you use your own car for business, but I'm not sure if this is the case if you are also being paid a car allowance?
Don't forget that the difference between your 12ppm and the 40ppm is only paid as a tax relief. You don't get the full amount back, just the tax on the amount at your tax rate, up to 10k miles a year. So, if you cover more than 10k business miles, you should get circa £300 back as a rebate if you are on 20% tax band. (Based on the deal i get below)
For the record, i run a Diseasel Octavia and my allowance is £200 (before tax) and 25ppm. I cover around 20k business miles a year and i'm struggling to fuel and maintain the car on that money.
The allowance is seen as a perk here too, but in reality it's nothing of the sort.
The way to work it out is:
Number of business miles multipled by the pence difference as a decimal (so in my example, the difference is 15p, or 0.15 as a decimal).
take that answer and times it by the tax band you are in (0.2 for 20% and 0.4 for 40%)
Confusing, but it works!!
For the record, i run a Diseasel Octavia and my allowance is £200 (before tax) and 25ppm. I cover around 20k business miles a year and i'm struggling to fuel and maintain the car on that money.
The allowance is seen as a perk here too, but in reality it's nothing of the sort.
The way to work it out is:
Number of business miles multipled by the pence difference as a decimal (so in my example, the difference is 15p, or 0.15 as a decimal).
take that answer and times it by the tax band you are in (0.2 for 20% and 0.4 for 40%)
Confusing, but it works!!
Edited by eltax91 on Friday 6th June 13:39
eltax91 said:
For the record, i run a Diseasel Octavia and my allowance is £200 (before tax) and 25ppm. I cover around 20k business miles a year and i'm struggling to fuel and maintain the car on that money.
With that kind of business mileage, are you not better off having a 'proper' company car - i.e opting into a scheme?Or is that not an option?
Just so all are aware the Government or Inland revenue allow's the following for rebates etc...
£0.40 for the first 10,000 miles
£0.25 for anything over 10,000 miles
So here's how it works (I was doing a small calc this morning before I phone my tax office and try and get a tax reduction):
Based on the 25K business miles i'll be doing -
I'm allowed up to the following -
10,000 miles @ £0.40 - £4,000.00
15,000 miles @ £0.25 - £3,750.00
£7,750.00
Now I get some £450 gross a month allowance inc fuel...harsh I know! therefore I am entiteled to a proportion of the difference
£7,750.00
- £5,400.00
Rebate £2,350.00
Remembering you wont get the full value but a proportion (and I have no idea how they calc that).
You can either claim it back on a end of tax year basis (P87) or phone your tax officer and explain the situation and see if they will adjust your tax code (thats how i'll be doing it). You will end up having to do a self assesment each year though which is getting easier!
If you recieve both a car allowance and fuel/mile then the figure will be a little less!
Hope thats of some help
Rich
£0.40 for the first 10,000 miles
£0.25 for anything over 10,000 miles
So here's how it works (I was doing a small calc this morning before I phone my tax office and try and get a tax reduction):
Based on the 25K business miles i'll be doing -
I'm allowed up to the following -
10,000 miles @ £0.40 - £4,000.00
15,000 miles @ £0.25 - £3,750.00
£7,750.00
Now I get some £450 gross a month allowance inc fuel...harsh I know! therefore I am entiteled to a proportion of the difference
£7,750.00
- £5,400.00
Rebate £2,350.00
Remembering you wont get the full value but a proportion (and I have no idea how they calc that).
You can either claim it back on a end of tax year basis (P87) or phone your tax officer and explain the situation and see if they will adjust your tax code (thats how i'll be doing it). You will end up having to do a self assesment each year though which is getting easier!
If you recieve both a car allowance and fuel/mile then the figure will be a little less!
Hope thats of some help
Rich
Yeah, Rich is correct - this is how it works.
Think of it this way - its a rebate on the tax you have paid during that financial year. Since you had to earn the money in the first place, you have paid tax on this already. So what you are getting back is a percentage of the tax you paid already for business purpose stuff. Seems fair really, but be careful though. The guidelines of 40p on the first 10k and then 25p on the rest are pretty generous, but for gods sake if you break these then its seen as a benefit and you will end up paying MORE tax. For example, if your employer pays you 40p a mile then you get NO rebate for the first 10k and then you have to pay money back for the rest.....
There is one company I know where the sales people refuse to go out if they cannot recharge 40p a mile. My wife (who does their accounts) tried in vain to explain that this wasnt a good idea. Low and behold everyone is now moaning that they don't get their £2k worth of tax rebate from April. Tits....
Opps, forgot to add:
I have Y/E 2008, Y/E 2007, Y/E 2004 and Y/E 2005 to claim yet.... please note that there is NO limit on the years you can go back on the P87 form. Though the IR reserve the right to force you to do tax return. Currently have a £100 fine for non-submittal but that's not a problem as they owe me LOADS!!!
Think of it this way - its a rebate on the tax you have paid during that financial year. Since you had to earn the money in the first place, you have paid tax on this already. So what you are getting back is a percentage of the tax you paid already for business purpose stuff. Seems fair really, but be careful though. The guidelines of 40p on the first 10k and then 25p on the rest are pretty generous, but for gods sake if you break these then its seen as a benefit and you will end up paying MORE tax. For example, if your employer pays you 40p a mile then you get NO rebate for the first 10k and then you have to pay money back for the rest.....
There is one company I know where the sales people refuse to go out if they cannot recharge 40p a mile. My wife (who does their accounts) tried in vain to explain that this wasnt a good idea. Low and behold everyone is now moaning that they don't get their £2k worth of tax rebate from April. Tits....
Opps, forgot to add:
I have Y/E 2008, Y/E 2007, Y/E 2004 and Y/E 2005 to claim yet.... please note that there is NO limit on the years you can go back on the P87 form. Though the IR reserve the right to force you to do tax return. Currently have a £100 fine for non-submittal but that's not a problem as they owe me LOADS!!!
Edited by off_again on Friday 6th June 13:56
of course the allowances are somewhat greater for mps...
Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
andrew. said:
of course the allowances are somewhat greater for mps...
Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
Makes you wonder if they are having to pay some tax back on that rate...ye right!!!!Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
Never makes sense how its one rule for the masses and another for the few!
andrew. said:
of course the allowances are somewhat greater for mps...
Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
What exactly is your point?Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
So their allowance is 57.7p per mile and then 26.6p after that? They still have to adhere to the HMRC limits of 40p and 25p though - so any difference they will have to pay additional income tax on.
Incidentally I know of several people who claim £1 per mile from their company to use their own car.
Edited by oyster on Friday 6th June 14:58
off_again said:
There is one company I know where the sales people refuse to go out if they cannot recharge 40p a mile. My wife (who does their accounts) tried in vain to explain that this wasnt a good idea. Low and behold everyone is now moaning that they don't get their £2k worth of tax rebate from April. Tits....
I think you've misunderstood how it works.They may lose out on £2K of tax rebate but they'll more than make up for it with the higher recharge rate.
For example:
To get a £2K tax rebate on mileage as a higher rate taxpayer:
35,000 business miles claimed at 15p per mile.
They'd receive £5250.
The tax reclaim would be 10,000 x £0.25 x 40% = £1000
PLUS 25,000 x £0.10 x 40% = £1000
Total tax Rebate: £2000
Therefore total received: £7,250
BUT if they claimed at 40p per mile.
They'd receive 35,000 x £0.40 = £14,000
But have to pay tax on all miles over the original 10,000.
Tax to pay would be 25,000 x £0.15 x 40% = £1500
Total received: £12,500
How are they tits for wanting to do it this way??
oyster said:
andrew. said:
of course the allowances are somewhat greater for mps...
Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
What exactly is your point?Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
So their allowance is 57.7p per mile and then 26.6p after that? They still have to adhere to the HMRC limits of 40p and 25p though - so any difference they will have to pay additional income tax on.
Incidentally I know of several people who claim £1 per mile from their company to use their own car.
Edited by oyster on Friday 6th June 14:58
my point is that the committee setting the rates for mps, whom i might expect to set a precedent in these matters, recognises that 40p/25p is not a realistic level
a
ps : can i ask why you removed half your response ?
andrew. said:
oyster said:
andrew. said:
of course the allowances are somewhat greater for mps...
Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
What exactly is your point?Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.
http://www.politics.co.uk/reference/issue-briefs/d...
So their allowance is 57.7p per mile and then 26.6p after that? They still have to adhere to the HMRC limits of 40p and 25p though - so any difference they will have to pay additional income tax on.
Incidentally I know of several people who claim £1 per mile from their company to use their own car.
Edited by oyster on Friday 6th June 14:58
my point is that the committee setting the rates for mps, whom i might expect to set a precedent in these matters, recognises that 40p/25p is not a realistic level
a
ps : can i ask why you removed half your response ?
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