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Where Taxpayers and Advisers Meet

Car Allowance and Fuel Card: Mileage allowance

Roadwarrior
Posts: 1
Joined: Thu Mar 14, 2019 3:40 pm

Car Allowance and Fuel Card: Mileage allowance

Postby Roadwarrior » Thu Mar 14, 2019 4:09 pm

Hello,

I have recently been offered with a job where i would have to do 35K-40K miles an year, company is offering me £3K car allowance and fuel card for business miles. Now i have few questions:

1. Is car allownace considered maintenance and running cost of your private car OR employer contribution towards your new/private car?
2, If car allowance is not running/maintenance, then employer would pay me only fuel cost of my business miles. Fuel card means employer would pay me approx 10p/mile i'd do for business while HMRC guideline says 45p for 1st 10,000 miles and 25p onwards. Can i claim tax relief at the end of the year? Let say If i do 40K miles an years with 20% tax bracket can i apply for tax relief of
(0.35x10,000x0.20 )+ (0.25x30,000x0.20) = £2200?
3. Am i missing somthing here? can employer define car allowance as running cost?
4. If i do not use company fuel card for my personal miles how would i prove at the end of year that i havnt used company fuel card for personal use?

Please feel free ro ask if anything isnt clear.

RW.

Piecykoos
Posts: 1
Joined: Wed Apr 24, 2019 6:44 pm

Re: Car Allowance and Fuel Card: Mileage allowance

Postby Piecykoos » Wed Apr 24, 2019 6:50 pm

Hi, did you get your answer from anywhere please?

robbob
Posts: 2748
Joined: Wed Aug 06, 2008 4:01 pm

Re: Car Allowance and Fuel Card: Mileage allowance

Postby robbob » Thu Apr 25, 2019 8:12 am

1. Is car allownace considered maintenance and running cost of your private car OR employer contribution towards your new/private car?
Generally car allowance is taxed in the same way as salary, check with your employer though to confirm this is the case.
2, If car allowance is not running/maintenance, then employer would pay me only fuel cost of my business miles. Fuel card means employer would pay me approx 10p/mile i'd do for business while HMRC guideline says 45p for 1st 10,000 miles and 25p onwards. Can i claim tax relief at the end of the year? Let say If i do 40K miles an years with 20% tax bracket can i apply for tax relief of
(0.35x10,000x0.20 )+ (0.25x30,000x0.20) = £2200?
Yes - i am presuming you are not paying tax on value of fuel card purchases.
3. Am i missing somthing here? can employer define car allowance as running cost?
Its an agreement between you and employer with regard to things like this , unless your contract of employment stipulates anything they can pay whatever both parties agree whether thats 90p a mile - 2p a mile - or a chocolate egg each time you fill up the car. HMRC don't get involved and tax consequence follows rules laid out - ie if employer pay you less you claim balance from hmrc.

Note you and employer both lose out where you are paid car allowance and lower mileage rate rather than full mileage rate and lower allowance as you will be paying NI on the car allowance payment even if you claim tax relief direct from hmrc.
4. If i do not use company fuel card for my personal miles how would i prove at the end of year that i havnt used company fuel card for personal use?
You always need a full log of business miles - date / description / miles and basic vehicle details - something hmrc could fact check if they so chose.


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