business mileage in personal car - tax question.
Discussion
Hi there,
I use my personal car for company business now and again. This year has seen me do around 15,000 company miles (much more than normal). My company pays me 35p / mile. This covers fuel, servicing, depreciation, wear and tear, etc.
Do I have to declare this to the tax man and if so what is the likely impact? Although I make some money on the fuel costs this is negated by the additional costs associated with servicing, wear and tear, higher depreciation, etc
Thanks and all the best.
Martin.
I use my personal car for company business now and again. This year has seen me do around 15,000 company miles (much more than normal). My company pays me 35p / mile. This covers fuel, servicing, depreciation, wear and tear, etc.
Do I have to declare this to the tax man and if so what is the likely impact? Although I make some money on the fuel costs this is negated by the additional costs associated with servicing, wear and tear, higher depreciation, etc
Thanks and all the best.
Martin.
Edited by MGYoung on Monday 23 April 11:12
Correct.
The 35p per mile amount already paid for you is less than the 40p ceiling allowed by the Revenue. As long as the pence per mile rate remains below 40p per mile, the Revenue do not need to be informed.
As has already been said, the Revenue will allow you to make an additional claim directly to them for the additional 5p which is the shortfall between the 35p actually claimed and the 40p you are allowed claim.
Don't forget, the 5p is claimable at your maximum tax rate.
For example, if you pay tax at 22% and had 1,000 business miles in the year, the effect on your tax liability for 2006/07 would be:
1,000 miles x 5p x 22% = reduction in tax liability for 2006/07 of £11.00.
The 35p per mile amount already paid for you is less than the 40p ceiling allowed by the Revenue. As long as the pence per mile rate remains below 40p per mile, the Revenue do not need to be informed.
As has already been said, the Revenue will allow you to make an additional claim directly to them for the additional 5p which is the shortfall between the 35p actually claimed and the 40p you are allowed claim.
Don't forget, the 5p is claimable at your maximum tax rate.
For example, if you pay tax at 22% and had 1,000 business miles in the year, the effect on your tax liability for 2006/07 would be:
1,000 miles x 5p x 22% = reduction in tax liability for 2006/07 of £11.00.
Eric Mc said:
Correct.
The 35p per mile amount already paid for you is less than the 40p ceiling allowed by the Revenue. As long as the pence per mile rate remains below 40p per mile, the Revenue do not need to be informed.
As has already been said, the Revenue will allow you to make an additional claim directly to them for the additional 5p which is the shortfall between the 35p actually claimed and the 40p you are allowed claim.
Don't forget, the 5p is claimable at your maximum tax rate.
For example, if you pay tax at 22% and had 1,000 business miles in the year, the effect on your tax liability for 2006/07 would be:
1,000 miles x 5p x 22% = reduction in tax liability for 2006/07 of £11.00.
The 35p per mile amount already paid for you is less than the 40p ceiling allowed by the Revenue. As long as the pence per mile rate remains below 40p per mile, the Revenue do not need to be informed.
As has already been said, the Revenue will allow you to make an additional claim directly to them for the additional 5p which is the shortfall between the 35p actually claimed and the 40p you are allowed claim.
Don't forget, the 5p is claimable at your maximum tax rate.
For example, if you pay tax at 22% and had 1,000 business miles in the year, the effect on your tax liability for 2006/07 would be:
1,000 miles x 5p x 22% = reduction in tax liability for 2006/07 of £11.00.
The OP has claimed for 15,000 miles at £0.40 (£5250), I thought you were allowed 10,000 miles at £0.40 and £0.20 thereafter (£5000)?
Hi Eric,
Does this apply within a tax standard tax year (April to April)? I will need to check how many miles a did last year but I'm pretty sure I'm well over the 10,000 limit. Does this mean I will pay tax on the miles over the 10,000 limit on which I claimed 35p / mile?
Thanks and all the best.
Does this apply within a tax standard tax year (April to April)? I will need to check how many miles a did last year but I'm pretty sure I'm well over the 10,000 limit. Does this mean I will pay tax on the miles over the 10,000 limit on which I claimed 35p / mile?
Thanks and all the best.
At 15,000 miles you should be tax neutral at the 35p rate you have claimed - 10,000 miles at 5p under, 5,000 at 10p over. Of course if a significant percentage of your mileage involves colleagues as passengers you might still be due some credit from IR. Your meticulous records of business mileage will of course support that 
Hi there,
I've kept detailed records for all my business miles including fuel receipts. If I've claimed more than I'm allowed will I have to declare this to the tax man and pay the difference.
For example if I have gone beyond being 'tax neutral' as Victormeldrew noted will I have to pay Mr Brown?
Thanks again for the all helpful advice.
All the best.
Martin.
I've kept detailed records for all my business miles including fuel receipts. If I've claimed more than I'm allowed will I have to declare this to the tax man and pay the difference.
For example if I have gone beyond being 'tax neutral' as Victormeldrew noted will I have to pay Mr Brown?
Thanks again for the all helpful advice.
All the best.
Martin.
In fact, your employer should be declaring the excess paid to you as a Benefit in Kind on a form P11d. This will be submitted to the Revenue by the employer by 6 July 2007. The employer should provide you with a copy of the P11d for your own records and to assist you with the completion of your Self Assessment tax return (should you be filling one in).
If the employer does the right thing, your 2007/08 PAYE coding notice should be amended to recover the small amount of addition 2006/07 tax liability. You shouldn't have to worry about paying the extra tax directly.
If the employer does the right thing, your 2007/08 PAYE coding notice should be amended to recover the small amount of addition 2006/07 tax liability. You shouldn't have to worry about paying the extra tax directly.
Eric Mc said:
Correct.
The 35p per mile amount already paid for you is less than the 40p ceiling allowed by the Revenue. As long as the pence per mile rate remains below 40p per mile, the Revenue do not need to be informed.
As has already been said, the Revenue will allow you to make an additional claim directly to them for the additional 5p which is the shortfall between the 35p actually claimed and the 40p you are allowed claim.
Don't forget, the 5p is claimable at your maximum tax rate.
For example, if you pay tax at 22% and had 1,000 business miles in the year, the effect on your tax liability for 2006/07 would be:
1,000 miles x 5p x 22% = reduction in tax liability for 2006/07 of £11.00.
The 35p per mile amount already paid for you is less than the 40p ceiling allowed by the Revenue. As long as the pence per mile rate remains below 40p per mile, the Revenue do not need to be informed.
As has already been said, the Revenue will allow you to make an additional claim directly to them for the additional 5p which is the shortfall between the 35p actually claimed and the 40p you are allowed claim.
Don't forget, the 5p is claimable at your maximum tax rate.
For example, if you pay tax at 22% and had 1,000 business miles in the year, the effect on your tax liability for 2006/07 would be:
1,000 miles x 5p x 22% = reduction in tax liability for 2006/07 of £11.00.
I believe there is a mileage limit on the 40p and then it goes down. To limit confusion most companies pay 40p which is hardly stunning anyway.
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