Tax Forum :: Free Tax Advice

Hi all,

Im a total noob to taxation and Im sure this question has been asked on here before but my computing skills are right up there with my Taxation skills - rubbish !

So, my situation is this:

I receive a car allowance from my company to the tune of 10% of my salary which I pay 40% tax on.
I also have a company fuel card which pays for both my private and business miles.
I figured I did around 22k business and 8k private miles.

I keep getting different answers from the inland revenue when I phone them as to whether I am supposed to claim anything back, can you guys help?

This area is poorly documented and there is no direct refernece to this situation on the HMRC site.

My understanding is as follows:

If you have a private vehicle used for business mileage AND you have all personal and business fuel paid for by your employer, the following points apply (If I am definintely wrong, please someone tell me).

- You can forget the 14800? valuation for a fuel card with a company car - this does not apply to the use of a private vehicle - so you can forget all that emissions stuff etc.

- You can get relieve on the Mileage Allowance Rate - thie is 40p a mile up to 10,000 p.a. and 25p a mile above 10,000 miles p.a. I understand you needto keep a record of your biz trips and submit them to the IR. You can then claim this back - it can therefore be significant.

However, if your employer is paying you in some manner, fuel card or expensed, then you have to subtract the employers contribution from the MAR rate - i.e. if you get 10p of fuel for each business mile you do from your employer, you can only claim back from the IR 40p - 10p = 30p for each mile you do. This is for less than 10,000 miles. If you do more than that the marginal rate drops so you are only getting 25p-10p = 15p per mile that you can claim back.

The private mileage can only be logically taxed as a benefit in kind - i.e. at whatever your marginal rate of tax is 20% or 40%. I would expect your employer would declare this annually to the IR - or indeed you complete it on your tax return.

All seems quite simple ( if it is correct - which I think this mostly is). Strange that nobody in the government can explain it on a web page anywhere and they are all so confused in the IR...! ))

Rog

P.S. If this is wrong, please someone tell me!

thanks for that, your answer makes sense but its difficult to get a straight answer out of the HMRC, I have spoken to their 'advisors' numerous times and never get the same answer twice.
First its, "fill out a self assessment" then its "fill out a P87", just lately its been "you cant claim anything back sir"

Apparently, the fully expensed fuel card is regarded as a benefit in kind because they pay for my private mileage and business mileage and so was told I cant claim anything back.
However my tax will change depending on how much fuel I have used (private and business combined) for the previous year which means I am paying more, the more miles Im doing regardless of whether its work or private mileage.

The Car allowance is also regarded as a BIK and taxed at 40% as if it were part of my normal wage, and so would not be able to claim anything back here either. I argued that if the company gave me £10 a year as a car allowance then in their eyes I wouldnt be able to claim anything back here either but would obviously be well out of pocket, I was then told "thats between you and your company sir".

Im not sure what to make of it as Im told a different story by them everytime, the whole "Tax made simple" is a joke when they cant get a straight answer.