Ive been working for present company for over 5 years now. Ive always been allowed to claim 20p per mile for business mileage. Car is mine but i get a car allowance every month. I have to pay for fuel, servicing, tyres etc.

How much can you claim?

Are mileage claims capped by what the government allows? Is it worth me trying to get an increase or is that likely to resuly in getting taxed more? I cant remember how mileage allowances work with regards to taxation. I do about 12000 business miles a year ish.

40p / mile up to a limit ( i think its 20000 but i would check that )

thats what the gov allow
Not shore about the car allowance you may be liable for tax on that
jason

[Edited on 8/9/08 by short track 123]

This is a big area but you can claim unlimited mileage allowances. The amount you can claim tax free is however limited. See the IR website for the latest figures.

I put fuel in my co. car and can claim back at a Govt/HMRC max of £0.13 / mile for business mileage before getting taxed on it. Co. pays lease/running costs and I get taxed on P11D values as normal.

At one point in the recent fuel price hikes the Govt/HMRC limt was still at £0.09 before moving to £0.11/mile. Makes you watch your mpg somewhat - which is no bad thing IMHO.

Nick

Last time I looked you could receive up 40p per mile for the first 10,000 miles and then 25p per mile for the remainder in any one year without it attracting tax.

That is however only the tax rule, what you negotiate with your employer is up to you.

Cheers

Mark

I get a straight 35p per mile, hasn't changed for years

You CAN claim anything you like as a mileage allowance. I believe our hardworking MP's claim 57p a mile.

However as Mook says beyond a certain limit and the Govt tax you on it. You CAN claim 40p a mile for the first 10,000 then 25p a mile thereafter without worrying about paying tax on it as income.

Any difference between what your company pay you and what you could claim can be taken as a tax allowance. Look for form P87.

I do 20,000 miles a year.

My company pay me 13p a mile = £2,600

I could claim:-

10,000 @ 40p = £4,000
10,000 @ 25p = £2,500

= £6,500

Therefore I claim back £6,500 - £2,600 = £3,900 back in tax rebate / offset.

HTH

Mike

What Guinness said - my company pays 25p per mile. For the limited amount of mileage I do, I could get up to 40p per mile without paying tax. I just did my tax return and put in a claim for a coupl of hundred pounds to cover the difference between 40p allowable and 25p received (I kept a spreadsheet listing all the trips I did, in case they need it).

EDIT - if by car allowance you mean money they pay you direct instead of giving you a company car, that is taxable as normal income.

[Edited on 08.09.2008 by Humbug]

Our company just pays the gov guidelines

40p per mile - upto 10000 miles
25p per mile - thereafter

Make sure YOUR insurance covers you though, as most don't by default.

Also check with your employer if your 'death in service' entitlement is applied to when driving - I know it sounds macabre, but most try to wriggle out of it, if you're driving the car, you're doing business and ARE covered.

Hope that isn't too morbid.

M

I get 46p/mile for the first 10,000 and then it goes down to 12p/mile.

Its my own car and I pay for everything.

I get 20p per mile just for petrol in my company car!

Stu

I claim back 0.13p/mile from my employer - Co. Car.

Private Car users are allowed 44p/mile.

Steve

I think my company makes a calculation based on mileage covered and the actual car allowance. If i knew how to calculate it im probs getting more that 20p per mile. Ill have to ask the finance bod.

What i was wondering was if it was worth asking for an increase in the 20p allowance, i suspect not as its probs already covered regarding tax allowances. I dont want to push for it to be increased only to find the tax man takes it back anyway.



Good point ref insurance - i have mine covered for business use. Doesnt increase it by much as i dont carry commercial samples.



Ive never done a tax return. Was thinking recently that it could be a good idea, however i hate paperwork and rely instead on employer doing their job correctly.