Business Mileage, Private Car
Discussion
When I do business mileage I know I'm entitled to 40p a mile for the 1st 10k but how is this worked out? I thought I would literally get 40p for every mile I did but according to my friend it's not that simple. If I did 10,000 business miles, higher rate tax payer - how much should I expect back from the tax man in terms of real cash in the pocket (my employer refunds zero)??
IIRC you can claim it back from the tax man with a P81 form if you're on PAYE.
40ppm for the first 10000 then 16ppm for anything over that is your allowance.
So if your allowance works out at say £9000 you don't get the 9k back. You get what tax you would have paid on the 9k back. For me, this was just short of 2k per year. Always sent to me just at the start of the summer holidays. Which was nice.
Alas, no more as I'm self employed now. So I don't pay tax lol...
40ppm for the first 10000 then 16ppm for anything over that is your allowance.
So if your allowance works out at say £9000 you don't get the 9k back. You get what tax you would have paid on the 9k back. For me, this was just short of 2k per year. Always sent to me just at the start of the summer holidays. Which was nice.
Alas, no more as I'm self employed now. So I don't pay tax lol...
Slightly incorrect, the allowable rates are 40p per mile for the first 10,000 business related miles and 25p for business miles over 10,000.
The system works like this -
most employees can claim business mileage directly from their employer. As long as the mileage rates claimed remain below the levels mentioned above, the tax man will NOT want to tax you on the money you receive from your employer in respect of these mileage claims.
If your employer pays you at rates higher than the 40p/25p mentioned above, you WILL be taxed on the additional sums paid under the PAYE Benefit in Kind rules.
If your employer pays you at rates LESS than the 40p/25p per mile levels, the employee can make a claim from the tax man for the amounts between what he actually gets and the 40p/25p amounts.
As has been pointed out, the tax man will not give you the full pence per mile amount claimed, but the pence per mile claim total multiplied by the top rate of tax you happen to pay - 22% for many people, 40% for some.
If you complete a Self Assessment tax return (some employees do), you can make these claims in the appropriate section of the tax return. If you do not complete a Self Assessment tax return, you can make aseparate claim as outlined in an earlier post.
The system works like this -
most employees can claim business mileage directly from their employer. As long as the mileage rates claimed remain below the levels mentioned above, the tax man will NOT want to tax you on the money you receive from your employer in respect of these mileage claims.
If your employer pays you at rates higher than the 40p/25p mentioned above, you WILL be taxed on the additional sums paid under the PAYE Benefit in Kind rules.
If your employer pays you at rates LESS than the 40p/25p per mile levels, the employee can make a claim from the tax man for the amounts between what he actually gets and the 40p/25p amounts.
As has been pointed out, the tax man will not give you the full pence per mile amount claimed, but the pence per mile claim total multiplied by the top rate of tax you happen to pay - 22% for many people, 40% for some.
If you complete a Self Assessment tax return (some employees do), you can make these claims in the appropriate section of the tax return. If you do not complete a Self Assessment tax return, you can make aseparate claim as outlined in an earlier post.
darrent said:
Thanks all, that now makes sense to me. No I don't get any mileage from my employer, I work for a Swedish firm and they dont do anything like that.
err...who owns the car?Surely they don't expect you to do business mileage in your own car without any compensation?
My company employs people in all the Nordic countries and they all get a business mileage allowance.
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