Mileage Allowance Payments - Running Expensive Cars
Discussion
With the government allowance been 45p for 10k miles and 25p after for work miles. If I were to run a car which cost more than that I understand I can claim the 'costs' back.
So how would that work if I wanted to run in theory a Veyron for my 30k miles I do for work each year? My understanding is I would be liable for the % costs from personal mileage like driving to the office and shops etc. but then I could claim the costs for mileage accrued to do my job back?
How do items like depreciation work out?
So how would that work if I wanted to run in theory a Veyron for my 30k miles I do for work each year? My understanding is I would be liable for the % costs from personal mileage like driving to the office and shops etc. but then I could claim the costs for mileage accrued to do my job back?
How do items like depreciation work out?
No can do.
If on HMRC "using own car for work" it's 45p for first 10K miles then 25p thereafter.
Do you get a monthly car allowance from your employer?
I managed to run a whole series of nice used cars using this method. Don't try to make a profit, just aim to break even on business miles and maintenance, etc.
I used to buy a AUC from Mercedes, BMW, SAAB (back in the day). You have 12 months warranty and MOT. Get rid after 12 months or about 25K miles.
Also, factor in the notional BIK tax on a company car that you won't be paying too.
If on HMRC "using own car for work" it's 45p for first 10K miles then 25p thereafter.
Do you get a monthly car allowance from your employer?
I managed to run a whole series of nice used cars using this method. Don't try to make a profit, just aim to break even on business miles and maintenance, etc.
I used to buy a AUC from Mercedes, BMW, SAAB (back in the day). You have 12 months warranty and MOT. Get rid after 12 months or about 25K miles.
Also, factor in the notional BIK tax on a company car that you won't be paying too.
Eric Mc said:
The employer has to pay additional NIC (Class 1A). The employee does not suffer any further Class 1 deductions on their salary.
Erm, this says otherwise.https://www.gov.uk/expenses-and-benefits-business-...
Eric Mc said:
The employer has to pay additional NIC (Class 1A). The employee does not suffer any further Class 1 deductions on their salary.
Are you sure? I always thought any payment above the approved mileage payment rate was deemed taxable earnings and subject to class 1 NICs as well as income tax.TheArchitect said:
With the government allowance been 45p for 10k miles and 25p after for work miles. If I were to run a car which cost more than that I understand I can claim the 'costs' back.
So how would that work if I wanted to run in theory a Veyron for my 30k miles I do for work each year? My understanding is I would be liable for the % costs from personal mileage like driving to the office and shops etc. but then I could claim the costs for mileage accrued to do my job back?
How do items like depreciation work out?
You can claim mileage from your employer if you're using your personal car for business mileage. If they pay you LESS than the HMRC rate you can claim tax relief on the difference. If they pay you MORE than the HMRC rate you have to pay tax on the excess.So how would that work if I wanted to run in theory a Veyron for my 30k miles I do for work each year? My understanding is I would be liable for the % costs from personal mileage like driving to the office and shops etc. but then I could claim the costs for mileage accrued to do my job back?
How do items like depreciation work out?
If your car costs £10 per mile to run you can still only claim 45p per mile. If your boss pays you £10 per mile then £9.55 is treated exactly the same as your salary.
The 45ppm is supposed to cover ALL motoring costs including depreciation, insurance, wear and tear.
What you guys have said above is inline with what I understood previously and wanted to confirm as someone who 'claimed' to know what he was talking about told me, if your paid by your employer over the 45/25ppm that you would need to prove your running costs (to the same amount paid per mile) to avoid BIK tax. However if my employer was unwilling to make the overpayments I could claim the difference back from the HMRC but I would need to prove all costs.
I was assuming this was incorrect but wanted to double check.
Also I am an employee who receives only a mileage allowance payment and no other car payments.
I was assuming this was incorrect but wanted to double check.
Also I am an employee who receives only a mileage allowance payment and no other car payments.
Edited by TheArchitect on Friday 14th August 10:47
TheArchitect said:
What you guys have said above is inline with what I understood previously and wanted to confirm as someone who 'claimed' to know what he was talking about told me, if your paid by your employer over the 45/25ppm that you would need to prove your running costs (to the same amount paid per mile) to avoid BIK tax. However if my employer was unwilling to make the overpayments I could claim the difference back from the HMRC but I would need to prove all costs.
All utter rubbish.MrSparks said:
If you use your car for work but they don't pay you anything (tight gits!!) can you claim tax relief on what you should be getting?
Yes. For example if you do 5000 miles per annum and get 0p from your employer you are entitled to tax relief on the sum of 5000 x 45p (£2,250). The amount of tax relief you will get depends on your marginal tax rate.If you pay tax at 20% you'll get £450
If you pay tax at 40% you'll get £900
If you pay tax at 45% you'll get £1,012
I am pretty sure that you can, if you wish, do a claim based on the business proportion use of a more expensive car that could get you a better deduction than the 45p per mile deduction. Self employed people can certainly do but I think it is also open to employed. So, if your car has running costs above 45p per mile in total, then it could be done.
But you would have to be brave to try it (the record keeping would be a nightmare) - and a car with high emissions would be a disaster as the capital allowance (tax-allowable depreciation) deduction is really dire (as in it could take many years after getting rid of the car to get the tax relief on the full depreciation unless the emissions are mega low - and if on a pcp I am not sure you can get capital allowances at all). So the hypothetical veyron would be a total disaster
My wife is self-employed and we do pence per mile rather than the complex approach. The only way it would benefit her to do the other is to fib about the business use proportion - doing legitimately, she is better off with the 45p approach
It can be a benefit if you have high business mileage (not including commute to work of course) - which I did when I worked for a firm of loss adjusters - relative to low private mileage
But you would have to be brave to try it (the record keeping would be a nightmare) - and a car with high emissions would be a disaster as the capital allowance (tax-allowable depreciation) deduction is really dire (as in it could take many years after getting rid of the car to get the tax relief on the full depreciation unless the emissions are mega low - and if on a pcp I am not sure you can get capital allowances at all). So the hypothetical veyron would be a total disaster
My wife is self-employed and we do pence per mile rather than the complex approach. The only way it would benefit her to do the other is to fib about the business use proportion - doing legitimately, she is better off with the 45p approach
It can be a benefit if you have high business mileage (not including commute to work of course) - which I did when I worked for a firm of loss adjusters - relative to low private mileage
oop north said:
I am pretty sure that you can, if you wish, do a claim based on the business proportion use of a more expensive car that could get you a better deduction than the 45p per mile deduction. Self employed people can certainly do but I think it is also open to employed. So, if your car has running costs above 45p per mile in total, then it could be done.
But you would have to be brave to try it (the record keeping would be a nightmare) - and a car with high emissions would be a disaster as the capital allowance (tax-allowable depreciation) deduction is really dire (as in it could take many years after getting rid of the car to get the tax relief on the full depreciation unless the emissions are mega low - and if on a pcp I am not sure you can get capital allowances at all). So the hypothetical veyron would be a total disaster
Really? How on earth does somebody on PAYE claim capital allowances? But you would have to be brave to try it (the record keeping would be a nightmare) - and a car with high emissions would be a disaster as the capital allowance (tax-allowable depreciation) deduction is really dire (as in it could take many years after getting rid of the car to get the tax relief on the full depreciation unless the emissions are mega low - and if on a pcp I am not sure you can get capital allowances at all). So the hypothetical veyron would be a total disaster
There are "some" tax reliefs available to employees, mainly mileage, uniform allowance, professional subs etc. there are NONE which let you claim the cost of running a car in excess of the 45ppm rate.
Hmm - I am sure it used to be possible (though that might be 26 years ago when I did my professional exams) - I cannot remember clearly how much I looked into it in 2008/2009 when I had thought of doing it - it may not have been possible then.
But I reckon that it should be possible to get some CAs if on PAYE, provided you can demonstrate the equipment is needed for work - though that might well be a theoretical possibility. Not my area of accountancy...
But I reckon that it should be possible to get some CAs if on PAYE, provided you can demonstrate the equipment is needed for work - though that might well be a theoretical possibility. Not my area of accountancy...
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