Business Mileage Reclaim

[slingerp]

I am in receipt of a car allowance of £4800 p.a. from my employer, and in addition, receive 14p per mile for business use. I have been advised that it is possible to reclaim a higher figure from the Inland Revenue against my tax. Is this correct and how would I go about reclaiming the difference? pss

[King_Maker]

As your employer does not pay the maximum Approved Mileage Rates (40p per mile for the first 10,000 miles, 25p per mile thereafter), you can claim any difference on form P87 or your Self Assessment Return.

HMRC's booklet 480 "Expenses & Benefits" has more detail and is downloadable from their website.

http://www.hmrc.gov.uk/leaflets/menu.htm

This assumes that your Car Allowance has been subject to PAYE.

[slingerp]

Yes PAYE was paid on the allowance, and have downloaded the Reclaim form from link.

Many Thanks for the 05-06 Bonus, as will be making a subsequent claim for the difference (6000 miles*26p worth)

slingerp

[King_Maker]

You're welcome.

I would point out that the refund is given in terms of tax - i.e. £1560 (6000 x 26p) @40% (assuming you are a higher rate taxpayer) = £624.00. However, if done by your employer, you would have received the extra £1560.00 in full (and still tax free).