Mileage rate, claiming from HMRC

[Calite]

Hey folks

Recently been hit with the news by my employers that they will no longer be paying the approved amount mileage payment (45ppm for first 10k, then 25ppm after), for folk who claim car allowance to run personal vehicles. Instead they’ll be moving us on to the same rate the company car drivers, the advisory fuel rate. With the expectation that the folk on the car allowance will claim back themselves from HMRC.

Given I do about 25k a year, and drive a 1.5 diesel which has an advisory rate of 12ppm, this is going to land me some £5k in the hole to pay for my running costs.

Still trying to dispute this with my employer, as I’ve never been in the position as a PAYE staff member not getting the approved rate before, and I’m 3 months into a 5 year HP deal on my car (which I bought a few months after getting this job) so will cost me a fortune to get out of if I go for the company car now.

But given that I’m not holding out hope, is there an efficient way to claim this money back? Have spoken to a family friend who is a financial advisor, who says he’s never seen anyone on paye in my band (top of 20%) need to complete a self assessment, but believes it’s the only way of doing this as I’ll be over the £2500 threshold to submit a claim through the government gateway.

Work uses SAP Concur for us to put our mileage/expenses against, so I imagine I’ll be able to pull records off of that, other than that I’m totally lost, manager doesn’t seem to have much help available as only 2 of the 10 engineers at our branch claim allowance instead of company cars.

Has anyone got any good resources to advise or guide me through the process?

Edited by Calite on Thursday 22 February 19:40

[Zarco]

You can do it here:

https://www.gov.uk/tax-relief-for-employees/vehicl...

[Calite]

Zarco said:

You can do it here:

https://www.gov.uk/tax-relief-for-employees/vehicl...

I’m over the £2500 threshold to claim via the gateway, my estimate being I’ll be claiming about £5250/yr which puts me in the self assessment range. That’s what I’m stuck on.

[Zarco]

Zarco said:

You can do it here:

https://www.gov.uk/tax-relief-for-employees/vehicl...

I should perhaps elaborate that I tried this myself when I was in a similar boat, and didn't get too far. IIRC HMRC decided they owed me a bit, but I also owed them a bit!

I tried again using Rift and got a decent rebate. I was working on construction projects so could claim various other expenses going back a few years. Rift obviously took a chunk for the pleasure, but I wasn't complaining.

[paddy1970]

Since your claim exceeds the £2500 threshold, you are correct that you will need to complete a Self Assessment tax return.

[Zarco]

Calite said:

I’m over the £2500 threshold to claim via the gateway, my estimate being I’ll be claiming about £5250/yr which puts me in the self assessment range. That’s what I’m stuck on.

Fair enough. I'm no tax expert.

That's why I paid a pro.

[Countdown]

"back of a fag packet" calculations

Under the old system you were getting £8,250
Under the new system you'll be getting £3,000
So you're down by £5,250

However HMRC won't be giving you the full £5,250, they'll be giving you 20% tax relief on the £5,250 (£1,050) - I'm not 100% sure but I think you might be able to reclaim that via the Gov Gateway.

[paddy1970]

Below is the process:

Register for Self Assessment: If you have not already filed a Self Assessment tax return, you will need to register with HMRC. This can be done online through the HMRC website.

Gather Documentation: Ensure you have detailed records of your business mileage and expenses. As your employer uses SAP Concur, you should be able to extract accurate records from there.

Calculate Your Claim: You will need to calculate the difference between the amount your employer pays you (12ppm) and the approved mileage allowance payment (AMAP) rate from HMRC (45ppm for the first 10,000 miles and 25ppm thereafter).

Complete Your Tax Return: When completing your Self Assessment tax return, include the details of your claim in the employment section. HMRC will use this information to calculate if you are due a tax refund.

[MaxFromage]

Calite said:

Hey folks

Recently been hit with the news by my employers that they will no longer be paying the approved amount mileage payment (45ppm for first 10k, then 25ppm after), for folk who claim car allowance to run personal vehicles. Instead they’ll be moving us on to the same rate the company car drivers, the advisory fuel rate. With the expectation that the folk on the car allowance will claim back themselves from HMRC.

Given I do about 25k a year, and drive a 1.5 diesel which has an advisory rate of 12ppm, this is going to land me some £5k in the hole to pay for my running costs.

Still trying to dispute this with my employer, as I’ve never been in the position as a PAYE staff member not getting the approved rate before, and I’m 3 months into a 5 year HP deal on my car (which I bought a few months after getting this job) so will cost me a fortune to get out of if I go for the company car now.

But given that I’m not holding out hope, is there an efficient way to claim this money back? Have spoken to a family friend who is a financial advisor, who says he’s never seen anyone on paye in my band (top of 20%) need to complete a self assessment, but believes it’s the only way of doing this as I’ll be over the £2500 threshold to submit a claim through the government gateway.

Work uses SAP Concur for us to put our mileage/expenses against, so I imagine I’ll be able to pull records off of that, other than that I’m totally lost, manager doesn’t seem to have much help available as only 2 of the 10 engineers at our branch claim allowance instead of company cars.

Has anyone got any good resources to advise or guide me through the process?

Edited by Calite on Thursday 22 February 19:40

Blimey, that is shockingly bad behaviour, which sounds like an effective 15% paycut when you take into account the net position. Your issues are further compounded by only being five months or so into the job.

[Calite]

MaxFromage said:

Blimey, that is shockingly bad behaviour, which sounds like an effective 15% paycut when you take into account the net position. Your issues are further compounded by only being five months or so into the job.

Yeah it’s a bugger, 6 months yesterday, Bought the car right as I completed my 3 months probation. Honestly don’t get why they’re doing it. Employers been otherwise really solid, tons of investment in staff have had oodles of training paid for by them, staff night outs all expenses paid. I have had a pretty crap history working for scum I felt like I’ve won a watch with my current crowd, which is why this kind of caught me off guard.

Worst thing is, from what my accountant mate was saying, it essentially doesn’t cost them much to pay the agreed rate, as they can claim it back themselves off their tax bill. Still trying to wrap my head around it to be honest.

Kind of wish I just took the company car now, but couldn’t get over the mental block of not owning my own car, and personally I prefer managing the maintenance & what not myself as I’m beyond anal about servicing, tyres etc.

Edited by Calite on Thursday 22 February 22:10

[Calite]

paddy1970 said:

Below is the process:

Register for Self Assessment: If you have not already filed a Self Assessment tax return, you will need to register with HMRC. This can be done online through the HMRC website.

Gather Documentation: Ensure you have detailed records of your business mileage and expenses. As your employer uses SAP Concur, you should be able to extract accurate records from there.

Calculate Your Claim: You will need to calculate the difference between the amount your employer pays you (12ppm) and the approved mileage allowance payment (AMAP) rate from HMRC (45ppm for the first 10,000 miles and 25ppm thereafter).

Complete Your Tax Return: When completing your Self Assessment tax return, include the details of your claim in the employment section. HMRC will use this information to calculate if you are due a tax refund.

Thanks, I had a rough idea of that process. I imagine I’ll be able to get itemised records of my mileage from concur which will be suitable for HMRC.

Issue I’m facing, I’m right in saying I need to submit a years records by the start of October, then I get the money back as a cheque in June? Or can I submit on a rolling basis of sorts?

EDIT: as per what another poster said, I'm right in saying for the purposes of mileage I can reclaim the full 45/25 minus 12 ppm. And it's not a adjustment that comes off of my PAYE tax code at 20p to the pound?

Edited by Calite on Thursday 22 February 21:40

[Rufus Stone]

Countdown said:

"back of a fag packet" calculations

Under the old system you were getting £8,250
Under the new system you'll be getting £3,000
So you're down by £5,250

However HMRC won't be giving you the full £5,250, they'll be giving you 20% tax relief on the £5,250 (£1,050) - I'm not 100% sure but I think you might be able to reclaim that via the Gov Gateway.

Just to reiterate this as correct in relation to what HMRC will be paying.

[Pit Pony]

Countdown said:

"back of a fag packet" calculations

Under the old system you were getting £8,250
Under the new system you'll be getting £3,000
So you're down by £5,250

However HMRC won't be giving you the full £5,250, they'll be giving you 20% tax relief on the £5,250 (£1,050) - I'm not 100% sure but I think you might be able to reclaim that via the Gov Gateway.

And you should be going back to the employer and saying that your car will no longer be available for business use, as the mileage figure they wish to use does not cover the cost, of fuel, insurance, depreciation, repairs servicing. But if they wish to get you a hire car, you are only too happy to continue to travel.

As the Granny on Little Britain says what a fking liberty.

[clockworks]

I was in a similar position 20 years ago. Working as an IT field engineer for a multinational, but through an agency, using my own car. I didn't get an allowance, but the 45p a mile covered everything. Nice earner, doing 40k miles a year.

With one month's notice, they reduced the payment to 13p and no allowance, same as they were paying hire car and company car users. The sums didn't work, so I asked for, and got, a hire car.

I got a full time contract with the company a few months later, and took the company car option.

[GR_TVR]

Calite said:

EDIT: as per what another poster said, I'm right in saying for the purposes of mileage I can reclaim the full 45/25 minus 12 ppm. And it's not a adjustment that comes off of my PAYE tax code at 20p to the pound?

No, the other poster(s) are correct; you will only get the difference back at your marginal tax rate, so roughly £3,000 from your employer and £1,050 from HMRC given your circumstances.

It's a crap one!

[TwigtheWonderkid]

Pit Pony said:

Countdown said:

"back of a fag packet" calculations

Under the old system you were getting £8,250
Under the new system you'll be getting £3,000
So you're down by £5,250

However HMRC won't be giving you the full £5,250, they'll be giving you 20% tax relief on the £5,250 (£1,050) - I'm not 100% sure but I think you might be able to reclaim that via the Gov Gateway.

And you should be going back to the employer and saying that your car will no longer be available for business use, as the mileage figure they wish to use does not cover the cost, of fuel, insurance, depreciation, repairs servicing. But if they wish to get you a hire car, you are only too happy to continue to travel.

As the Granny on Little Britain says what a fking liberty.

Errr ...he's getting a car allowance. What do you think that is for, if not buying/leasing and running a car. Fuel is the only factor in play here, because a car allowance is an alternative to a company car and a company car driver would get fuel paid, but only at HMRC rate of 12ppm for the OP's car.

The problem here is that the employer has been quite generous previously in payig the 45ppm for a car allowance driver. That's the rate paid to people using their own car and not getting a car allowance.

But.....that's what the employer did and that's the basis on which the OP bought his car. I think it's harsh of the employer to move the goalposts mid term in the agreement, even if they are being moved to wear they should have been.

[VeeReihenmotor6]

I would be asking for a hire car or a company car. Those numbers simply will never work for you and you'll have to wait until the self assessment window to claim back part of the monies spent. Either way your monthly cash flow budget will be severly impacted. The 45ppm mile is meant to cover fuel but also wear and tear on your car, none of this is being covered with the employers change of policy so I would refuse to use my personal car.

[Rufus Stone]

TwigtheWonderkid said:

Errr ...he's getting a car allowance. What do you think that is for, if not buying/leasing and running a car. Fuel is the only factor in play here, because a car allowance is an alternative to a company car and a company car driver would get fuel paid, but only at HMRC rate of 12ppm for the OP's car.

The problem here is that the employer has been quite generous previously in payig the 45ppm for a car allowance driver. That's the rate paid to people using their own car and not getting a car allowance.

But.....that's what the employer did and that's the basis on which the OP bought his car. I think it's harsh of the employer to move the goalposts mid term in the agreement, even if they are being moved to wear they should have been.

I read it as the 45p per mile was the car allowance rather than on top of, but you may be correct. Clarification needed.

[onetwothreefour]

TwigtheWonderkid said:

Pit Pony said:

Countdown said:

"back of a fag packet" calculations

Under the old system you were getting £8,250
Under the new system you'll be getting £3,000
So you're down by £5,250

However HMRC won't be giving you the full £5,250, they'll be giving you 20% tax relief on the £5,250 (£1,050) - I'm not 100% sure but I think you might be able to reclaim that via the Gov Gateway.

And you should be going back to the employer and saying that your car will no longer be available for business use, as the mileage figure they wish to use does not cover the cost, of fuel, insurance, depreciation, repairs servicing. But if they wish to get you a hire car, you are only too happy to continue to travel.

As the Granny on Little Britain says what a fking liberty.

Errr ...he's getting a car allowance. What do you think that is for, if not buying/leasing and running a car. Fuel is the only factor in play here, because a car allowance is an alternative to a company car and a company car driver would get fuel paid, but only at HMRC rate of 12ppm for the OP's car.

The problem here is that the employer has been quite generous previously in payig the 45ppm for a car allowance driver. That's the rate paid to people using their own car and not getting a car allowance.

But.....that's what the employer did and that's the basis on which the OP bought his car. I think it's harsh of the employer to move the goalposts mid term in the agreement, even if they are being moved to wear they should have been.

But HMRC don't treat car allowances any differently from salary (they are taxed and subject to NI) - they are not considered as reimbursement for a business expense (which is neither taxable nor subject to NI). I've had a car allowance + reimbursement for mileage in a previous job and it's entirely reasonable. (A car allowance allows you to buy and run a car that you use for commuting, which is not a business expense - hence taxable benefit).

OP: you need to register for SA, work out the total mileage allowance at HMRC rates, deduct from that what your employer does reimburse you, and put that in the 'unreimbursed expenses' part of SA. This will result in your taxable income being reduced and your tax will accordingly reduce, so that you will get a refund (assuming your PAYE tax is otherwise correct). You do need to keep records, but for SA you just need to fill in the number; it is worth adding in the text box on the SA form the total number of miles, and amount reimbursed by your employer. Advice from Countdown and PitPony above is spot on.

[Countdown]

onetwothreefour said:

But HMRC don't treat car allowances any differently from salary (they are taxed and subject to NI) - they are not considered as reimbursement for a business expense (which is neither taxable nor subject to NI). I've had a car allowance + reimbursement for mileage in a previous job and it's entirely reasonable. (A car allowance allows you to buy and run a car that you use for commuting, which is not a business expense - hence taxable benefit).

It depends how your expenses system is set up. At a previous workplace we would put car allowance, mileage payments, and mileage travelled on the P11d and reported this to HMRC.

HMRC would look at what we had paid in total , calculate what the staff member should have been paid under the 45ppm/25ppm and then only tax the excess.

So if somebody received £2.4k per annum car allowance and did zero miles the full amount would be taxable. However if they did 50,000 miles reombursed at 12ppm then the £2.4k would be pretty much tax free.