Car Allowance Classed as Benefit in Kind?
Discussion
Apologies as I might be mis-remembering this.....but I thought the whole of the car allowance was only taxable IF the employee also received the full HMRC rate for mileage reimbursement (ie 45ppm).
Where the employer paid a reduced rate (eg 10ppm) then part of the car allowance was used to offset the shortfall and therefore wasn’t taxable???? What our expenses team would do is to report car allowance and mileage payments on a P11d which would inform HMRC of any under/overpayments of taxes on BIK and they would adjust the Tax Code accordingly.
This was about 10 years ago so things may well have changed since then.....
Where the employer paid a reduced rate (eg 10ppm) then part of the car allowance was used to offset the shortfall and therefore wasn’t taxable???? What our expenses team would do is to report car allowance and mileage payments on a P11d which would inform HMRC of any under/overpayments of taxes on BIK and they would adjust the Tax Code accordingly.
This was about 10 years ago so things may well have changed since then.....
Countdown said:
Apologies as I might be mis-remembering this.....but I thought the whole of the car allowance was only taxable IF the employee also received the full HMRC rate for mileage reimbursement (ie 45ppm).
Where the employer paid a reduced rate (eg 10ppm) then part of the car allowance was used to offset the shortfall and therefore wasn’t taxable???? What our expenses team would do is to report car allowance and mileage payments on a P11d which would inform HMRC of any under/overpayments of taxes on BIK and they would adjust the Tax Code accordingly.
This was about 10 years ago so things may well have changed since then.....
You pay tax on cad allowance as if is a salary increase so either 20 or 40% basically Where the employer paid a reduced rate (eg 10ppm) then part of the car allowance was used to offset the shortfall and therefore wasn’t taxable???? What our expenses team would do is to report car allowance and mileage payments on a P11d which would inform HMRC of any under/overpayments of taxes on BIK and they would adjust the Tax Code accordingly.
This was about 10 years ago so things may well have changed since then.....
In terms of mileage I personally claim the difference back between what I get paid a mile and 45p a mile at the end of he year. I keep all my business mileage expenses and then submit via HMRC and get a tax refund on the difference which again will be either 20 or 40%
greggy50 said:
You pay tax on cad allowance as if is a salary increase so either 20 or 40% basically
In terms of mileage I personally claim the difference back between what I get paid a mile and 45p a mile at the end of he year. I keep all my business mileage expenses and then submit via HMRC and get a tax refund on the difference which again will be either 20 or 40%
This is what I also do, I enjoyed my £190 rebate a few weeks ago for last tax year. In terms of mileage I personally claim the difference back between what I get paid a mile and 45p a mile at the end of he year. I keep all my business mileage expenses and then submit via HMRC and get a tax refund on the difference which again will be either 20 or 40%
Bear in mind that if you are getting a car allowance, you will probably have some rules around what you are permitted to use as "a car" - for example I am expected to own and maintain something "under 10 years old, with less than 200,000 miles" which must also "be a car with seating for 4 adults and an internal load area" (ie, a boot) so I can't use a van or pickup truck, but I could probably try and use a minibus if I wanted to...
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