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Where Taxpayers and Advisers Meet

tax on mileage payment

emmapatricia0
Posts:1
Joined:Thu Jul 07, 2022 9:07 am
tax on mileage payment

Postby emmapatricia0 » Thu Jul 07, 2022 9:11 am

Good morning
I work for my local council and get paid 56p a mile as I was TUPE from NHS 3 years ago.

Then council pay my claim monthly together with my salary and tax is paid on it. When I worked for the NHS I was not taxed on mileage claims. I have read some things online and its all a bit confusing!
Thanks Emma

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: tax on mileage payment

Postby Jholm » Thu Jul 07, 2022 11:12 am

Anything over 45p/mile will always be taxable

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: tax on mileage payment

Postby darthblingbling » Thu Jul 07, 2022 1:42 pm

Anything over 45p (or 25p per mile if annual business mileage goes over 10p) is taxable.

For NIC the rate is 45p for all business miles. The excess is subject to Class 1 NIC.

It's a quirky one as I believe the profit is put on your P11D for tax purposes, but the Class 1 NIC is collected via the payroll.

The rates have never been higher than 45p. So either your NHS trust handled it incorrectly or you may have missed it. You may not have been aware that it was put on a P11D and the tax may have been collected through your tax code.

RoryDickerson
Posts:6
Joined:Thu Mar 09, 2023 6:10 pm

Re: tax on mileage payment

Postby RoryDickerson » Sat Mar 11, 2023 9:18 pm

The tax treatment of mileage payments can be confusing, but in general, if you receive mileage payments from your employer, they may be subject to tax and National Insurance contributions (NICs) depending on how they are structured.

If your mileage payments are made at a rate that is equal to or lower than the HMRC-approved rates (currently 45p per mile for the first 10,000 business miles in a tax year, and 25p per mile for any additional business miles), then they can be paid tax-free. However, if the rate exceeds the HMRC-approved rates, the excess will be subject to tax and NICs.

In your case, it sounds like the council is paying you 56p per mile, which is higher than the HMRC-approved rates. As a result, the excess over the HMRC-approved rates will be subject to tax and NICs.

It's worth noting that your previous employer, the NHS, may have had a different policy on mileage payments, which is why you may not have been taxed on your mileage claims while working there.

If you have any concerns or questions about how your mileage payments are being taxed, it's best to speak to your employer or contact HMRC directly for clarification.


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