Business Mileage Allowance

[high.pressure]

Hi, I currently operate my own car for which I receive from my company a cash allowance and 40p for the first 10,000 and 25p for any extra business miles.

I have been offered another job which again pays a cash allowance for the car but only 12p for all business miles, am I correct in assuming that I can claim the balance of money from the tax man at the end of the year.

ie 28p per mile for the first 10,000 miles and 13p for all miles over that ?

Would I have to make this claim at the end of the financial year (April) and then get a cheque or would it come through in my wages ?

Is it a hassle to do this, do they have big forms ryc to fill in ?

Any advice would be much appreciated

Regards

Steve

[robbob]

Hello high

Yes you can claim RELIEF on the difference between the authorised rate and what you have been paid.
The form is not too difficult to complete - it is available for download here for 08/09
http://www.hmrc.gov.uk/forms/p87.pdf

You should keep a good log to substantiate your claim so keep copies of details of all claims made.

[high.pressure]

Thanks Rob, sorry if i sound a bit thick but what do you mean be relief on the balance

Does that mean that I will not get the differance in cold hard cash ??

Steve

[robbob]

Hello steve

Say you did 10,000 miles and got paid 28p = £2800
You can claim for tax relief on the additional 12p = £10,000 * .12 = 1200
If you are a standard rate taxpayer you will get a refund of 1200 * 20% = £240
If you are a higher rate taxpayer you would get a refund of 1200*40% = £480

So you are still out of pocket quite a bit compared to when you got the full 40p a mile.

I am presuming that both companies are taxing you in full on the cash allowance as if this was normal salary.

[high.pressure]

Blimey so I will be quite a bit out of pocket then compared to what I currently get.

They will pay me 12p for all business miles, so correct me if I am wrong but;

For the first 10,000 miles I will get;

12p * 10,000 = £1,200 from the new company
28p * 10,000 = £2,800 * 40% = £1,120 from the tax man (as I am a high rate tax payer)

Total from new company £2,320
Total from existing company £4,000

And for the second 10,000 miles;

12p * 10,000 = £1,200 from the new company
13p * 10,000 = £1,300 * 40% = £520 from the tax man (as I am a high rate tax payer)

Total from new company £1,720
Total from existing company £2,500

Total out of pocket based upon my annual 20,000 business miles would be £2,460, this is a lot to lose out per year me thinks !!!!

Steve

[robbob]

Hello Steve

Your calculations are correct

To be fair to the revenue it is your new employer that is giving the worse deal than the old one.
If the revenue made up the whole shortfall then i suspect every business would simply pay 0.01p per mile.
At least the revnue are generous enough to partly recompense you.

[courty61]

Steve, I have one question on this- is this milage payments for business use of your own personal car? Or have your new employers supplied a company car for you?

[high.pressure]

Rob, I suppose you are correct makes the new job offer not so attractive !

Courty61, yes it is my own car. I opted out the company car scheme just over a year ago and took the cash allowance.

Steve

[giles]

I have my own car and and receive a car allowance from my Company.

I work at a temporary site (I have been there for 12 months and the contract will end in 6 months time) and I travel there most days - a round trip of 125 miles per day.

My firm does not pay business mileage for my journey from home to temporary site, instead they pay a travel allowance; a lump sum every month calculated by the straight line distance from my home postcode to temporary site(in my case £269.73 of which £49.63 is taxable).

I get the same amount each month whether or not I travel to the site each day, although the assumption is that I will be there most days.

As my journey is to a temporary site, could I claim tax relief on any of my business mileage from the Inland Revenue.

If the answer is yes then could I claim 40p for the first 10,000 miles and then 25p thereafter or would my travel allowance be deemed as part payment for my business miles?

Help appreciated.

[Peter D]

You seem to have forgotten about the cash allowance. Does this appear o your P11D as this may bar you from claiming relief on the delta. Regards Peter