Advisory fuel rates and Mileage rates

[Tom W]

I have to do a lot of driving as part of my job and have to use my own vehicle. My employer pays me double the advisory fuel rate for my vehicle and gives me 26p per mile. I believe I should get 45p per mile according to the mileage rate. Can I get the difference ie 19p additional money. If so how do I get this?

[GlobalTaxAdviser]

Hi

Yes if its your own vehicle you should get 0.45p and can claim the difference through P87 form

The 0.45p includes element for insurance, repairs, depreciation. Your employer should be reimbursing you 0.45p not 0.26p as otherwise you still will be losing out as essentially you are just getting tax relief at your marginal tax rate.

Kind Regards

GTA

[Tom W]

Hi

Yes if its your own vehicle you should get 0.45p and can claim the difference through P87 form

The 0.45p includes element for insurance, repairs, depreciation. Your employer should be reimbursing you 0.45p not 0.26p as otherwise you still will be losing out as essentially you are just getting tax relief at your marginal tax rate.

Kind Regards

GTA

Many thanks for the reply GTA,

So can I only claim this additional amount from my employer to so it totals 45p per mile or can I claim this additional amount in tax relief on my HMRC tax return?

Additionally it seems like on one occasion I missed making a claim from quite a while ago. Do you think I can just claim this complete 45ppm amount from HMRC as I don't want to start annoying work despite the fact that I'm actually entitled to it?

[GlobalTaxAdviser]

Hi

You can claim the difference as tax relief so doesn't work out so much

No you cannot claim 0.45p from HMRC as that would be wrong. Maybe at some point just having a nice conversation with your employer that this costing you money.

You can actually work out how much it is costing you per mile.

Kind Regards

GTA

[Tom W]

Hi GTA,

Once again many thanks for your advice GTA.

I ended up ringing HMRC as I couldn't get onto their website using the activation code they sent. After a very long wait I got a walk through talk through of setting it all up. While they were on the phone I did ask about claiming the complete 45p with them rather than the reduced amount from my employer and the difference as a rebate. They seemed to think it would be fine claiming the entire 45p through HMRC as a rebate.

I'll give it a go and see what happens.

Kind Regards,

Tom

[bd6759]

That makes n sense at all.

HMRC will not give you 45p. They will give you tax relief on 45p. If you pay tax at 20%, that means HMRC will give you 9p.

Do you really want to tell your employer not to give you 26p so that you can claim 9p from HMRC?

[AdamS93]

Tom,

You can only claim tax relief on the difference between 45p and the 26p you have been paid. This has been made clear to you in the above posts.

If you claim tax relief for the full 45p and your employer pays you the 26p this is incorrect. The P87 will ask you what your employer has repaid you for your business mileage, so to claim the full 45p you will have to lie on the P87 which won't go down well with HMRC.

You need to speak to your employer, who may or may not agree to pay you more for your business mileage. It has noting to do with HMRC as HMRC are not your employer, why should they pay the costs which are your employer's responsibility.

There are two choices;

1. You receive the 26p from your employer, and you claim tax relief for the 19p shortfall
2. Ask you employer to pay you more - there is no obligation for them to pay more unless it is your contract of employment so don't walk in to your managers office making demands, remain amicable and you might get somewhere

There are no other options except getting a new job. You most definitely shouldn't make a fraudulent expenses claim.