Business Expenses
Discussion
I'm a PAYE employee and recently we've had a change at the top ...
First issue is that my P11d has been completed. We used to be able to claim 40ppm for business miles in line with the tax man's rules.
Unfortunatly, I get a "car allowance" so now the Company has decided that I can only claim the fuel only rate, in my case 19ppm.
My P11d now shows an "overpayment" of £900 in the column for mileage payments. Kindly, they have backdated this tight new rule to include last tax year. Gits. So, I read this as the Company paying me more than 40ppm to the tune of £900 and the tax man will want his cut. Is that right?
The new ppm rate as of July is 21ppm, so I am claiming that from the Company. As that doesn't cover my fuel, can I get any more money from the tax man?
Next part is travelling expenses. There are sections on the P11d for these too. What happens to the values in there? Am I taxed on them too?
We also have to declare as "entertaining staff" our receipts for everything where we are not alone, meal in the hotel / coffee at the airport and so on ...
I'm a bit worried as I travel / spend a hell of a lot and I don't want to pay for the honour of working my
off for this mob.
First issue is that my P11d has been completed. We used to be able to claim 40ppm for business miles in line with the tax man's rules.
Unfortunatly, I get a "car allowance" so now the Company has decided that I can only claim the fuel only rate, in my case 19ppm.
My P11d now shows an "overpayment" of £900 in the column for mileage payments. Kindly, they have backdated this tight new rule to include last tax year. Gits. So, I read this as the Company paying me more than 40ppm to the tune of £900 and the tax man will want his cut. Is that right?
The new ppm rate as of July is 21ppm, so I am claiming that from the Company. As that doesn't cover my fuel, can I get any more money from the tax man?
Next part is travelling expenses. There are sections on the P11d for these too. What happens to the values in there? Am I taxed on them too?
We also have to declare as "entertaining staff" our receipts for everything where we are not alone, meal in the hotel / coffee at the airport and so on ...
I'm a bit worried as I travel / spend a hell of a lot and I don't want to pay for the honour of working my
off for this mob.Taking the points in turn you are able to claim an allowance for business mileage when using a private car to the tune of 40p per mile for the first 10,000 miles per tax year and 25p a mile thereafter.
It is at the discretion of the Company whether they pay this amount or more or less than this amount.
On the assumption that you have been using your own private car for business mileage when you were paid 40p per mile then they should not be reporting this a benefit on the P11D as you can receive up to the 40 per mile tax free. Any amount over 40p for the first 10,000 or over 25p thereafter would need to be reported.
You should record all business mileage undertaken in a private car at these new rates where they are not re-imbursing you at the HMRC approved rates as you will be able to claim a repayment from HMRC either via your tax return or by writing to them at the end of the tax year.
Business expenses incurred in the performance of duties as an employee of this company will be allowable. You may find that your employer doesn't have a P11d dispensation in place with HMRC (to avoid them having to report these expenses on the P11d). Therefore you will have these amounts shown on your P11d and will have to enter into a s.336 election or alternatively note on your tax return to say they were expenses in the performance of the duties and are not taxable.
With regards the noting down of who was present when the expense was incurred is more driven by corporate tax as some may be allowable and some not for the company.
That’s my thoughts anyways, hope they help.
It is at the discretion of the Company whether they pay this amount or more or less than this amount.
On the assumption that you have been using your own private car for business mileage when you were paid 40p per mile then they should not be reporting this a benefit on the P11D as you can receive up to the 40 per mile tax free. Any amount over 40p for the first 10,000 or over 25p thereafter would need to be reported.
You should record all business mileage undertaken in a private car at these new rates where they are not re-imbursing you at the HMRC approved rates as you will be able to claim a repayment from HMRC either via your tax return or by writing to them at the end of the tax year.
Business expenses incurred in the performance of duties as an employee of this company will be allowable. You may find that your employer doesn't have a P11d dispensation in place with HMRC (to avoid them having to report these expenses on the P11d). Therefore you will have these amounts shown on your P11d and will have to enter into a s.336 election or alternatively note on your tax return to say they were expenses in the performance of the duties and are not taxable.
With regards the noting down of who was present when the expense was incurred is more driven by corporate tax as some may be allowable and some not for the company.
That’s my thoughts anyways, hope they help.
The mileage part matched my understanding. I doubt the Company have any agreement about expenses being exempt from the P11d, at the moment they say they "forgot" to put them on.
I know have a change in tax code to reclaim the tax of the £875 I have been "overpaid" for my mileage.
Time to call the tax man them I think ...
I know have a change in tax code to reclaim the tax of the £875 I have been "overpaid" for my mileage.
Time to call the tax man them I think ...
Car Allowance is just additional salary so has no effect on motor expense claims.
If you are only claiming 19p per mile. you are entitled to make a separate claim for the "missing" 21p per mile directly to the Revenue.
So, are you telling us that your employer actually paid you 40p per mile but declared to the Revenue that 21p of that was really a Benefit in Kind and that you are now being taxed on the 21p per mile element of your motor expense claims?
If that is the case, making your own separate claim for the additional 21p per mile amount should cancel out the taxable benefit being charged on you by the Revenue.
If you are only claiming 19p per mile. you are entitled to make a separate claim for the "missing" 21p per mile directly to the Revenue.
So, are you telling us that your employer actually paid you 40p per mile but declared to the Revenue that 21p of that was really a Benefit in Kind and that you are now being taxed on the 21p per mile element of your motor expense claims?
If that is the case, making your own separate claim for the additional 21p per mile amount should cancel out the taxable benefit being charged on you by the Revenue.
Talking about claiming back the difference, I pay my guys 20p per mile and one of them has just claimed the difference back for last year as you all suggest. Because she is a low rate tax payer she didn't get all of the difference back but a percentage and she is now out of pocket to the tune of £800. She has been told by the IR that had she been a high rate payer she would have god all of the difference back.....
Why is that? I thought everyone was entitled to the full difference, not just those who were earning more money!
Why is that? I thought everyone was entitled to the full difference, not just those who were earning more money!
Both you and her are confused.
The Revenue do not pay to the tax payer the actual mileage claim - they give TAX RELIEF to the tax payer BASED on their mileage claim.
So, what they actually get back is the mileage claim multiplied by the maximum rate of tax the taxpayer actually pays.
Examples:
John is a Basic Rate Tax payer (22% in 2007/08 - now 20%). His boss paid him 28p per mile in 2007/08. John wants to make an additional claim for the "missing" mileage amount of 12p per mile. He did 4,000 business miles in 2007/08.
His claim is therefore 4,0000 x 12p = £480 @ 22% = £105.60
Bill is a Higher Rate Tax payer (40%). His boss paid him 28p per mile. Bill wants to make an additional claim for the "missing" mileage amount of 12p per mile. He also did 4,000 business miles in 2007/08.
His claim is therefore 4,0000 x 12p = £480 @ 40% = £192.00
That's the way it works. The Revenue can only refund to you tax. They can't actually pay for your motoring costs.
The Revenue do not pay to the tax payer the actual mileage claim - they give TAX RELIEF to the tax payer BASED on their mileage claim.
So, what they actually get back is the mileage claim multiplied by the maximum rate of tax the taxpayer actually pays.
Examples:
John is a Basic Rate Tax payer (22% in 2007/08 - now 20%). His boss paid him 28p per mile in 2007/08. John wants to make an additional claim for the "missing" mileage amount of 12p per mile. He did 4,000 business miles in 2007/08.
His claim is therefore 4,0000 x 12p = £480 @ 22% = £105.60
Bill is a Higher Rate Tax payer (40%). His boss paid him 28p per mile. Bill wants to make an additional claim for the "missing" mileage amount of 12p per mile. He also did 4,000 business miles in 2007/08.
His claim is therefore 4,0000 x 12p = £480 @ 40% = £192.00
That's the way it works. The Revenue can only refund to you tax. They can't actually pay for your motoring costs.
Edited by Eric Mc on Thursday 31st July 12:26
Eric Mc said:
Both you and her are confused.
The Revenue do not pay to the tax payer the actual mileage claim - they give TAX RELIEF to the tax payer BASED on their mileage claim.
So, what they actually get back is the mileage claim multiplied by the maximum rate of tax the taxpayer actually pays.
Examples:
John is a Basic Rate Tax payer (22% in 2007/08 - now 20%). His boss paid him 28p per mile in 2007/08. John wants to make an additional claim for the "missing" mileage amount of 12p per mile. He did 4,000 business miles in 2007/08.
His claim is therefore 4,0000 x 12p = £480 @ 22% = £105.60
Bill is a Higher Rate Tax payer (40%). His boss paid him 28p per mile. Bill wants to make an additional claim for the "missing" mileage amount of 12p per mile. He also did 4,000 business miles in 2007/08.
His claim is therefore 4,0000 x 12p = £480 @ 40% = £192.00
That's the way it works. The Revenue can only refund to you tax. They can't actually pay for your motoring costs.
Thanks Eric, clear and now understood! The Revenue do not pay to the tax payer the actual mileage claim - they give TAX RELIEF to the tax payer BASED on their mileage claim.
So, what they actually get back is the mileage claim multiplied by the maximum rate of tax the taxpayer actually pays.
Examples:
John is a Basic Rate Tax payer (22% in 2007/08 - now 20%). His boss paid him 28p per mile in 2007/08. John wants to make an additional claim for the "missing" mileage amount of 12p per mile. He did 4,000 business miles in 2007/08.
His claim is therefore 4,0000 x 12p = £480 @ 22% = £105.60
Bill is a Higher Rate Tax payer (40%). His boss paid him 28p per mile. Bill wants to make an additional claim for the "missing" mileage amount of 12p per mile. He also did 4,000 business miles in 2007/08.
His claim is therefore 4,0000 x 12p = £480 @ 40% = £192.00
That's the way it works. The Revenue can only refund to you tax. They can't actually pay for your motoring costs.
Edited by Eric Mc on Thursday 31st July 12:26
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