Help needed with tax on private mileage claim with non-company car

What is worth doing if you dont already do it is to claim a tax allowance for your company miles. IIRC the tax man accepts a standard rate of 45p/mile as a "business expense". So provided your company mile payment before tax is less than 45p/mile you will be better off.

You do of course include the petty cash payment for private miles in your tax return?! The fact that it is a private mileage allowance doesnt matter, its simply extra wages.

Similarly your car allowance isnt anything special, it again is treated as additional wages.

Warn>Hi, can anyone help me understand what I need to do to ensure I don't

It isn't customary not to use no double negative for this type of question.

Can you clarify:

You get car allowance (how much?)

*plus* payment for business miles (how much per mile?) *plus* cost of fuel for private miles?

The rules are simple. You can be reimbursed up to 40p per business mile without it being treated as taxable income. This is OK up to 10000 miles each year. After that, it's 25p per extra business mile.

Suppose you get a car allowance of £2000 per year plus 30p per business mile, and that you in fact do 12000 business miles for which you get paid

30p each, and that you do 8000 private miles at a calculated fuel cost of 10p per mile.

The £2000 will already have been taxed through PAYE.

The allowance for 12000 business miles is 40p*10000 + 25p*2000 = £4500.

You get paid business mile allowance at 30p*12000 = £3600, and this will not have been taxed through PAYE, and in fact you have £900 spare allowance.

The private miles attract fuel payment of 10p*8000 = £800.

Therefore you do not have to pay tax on the private fuel money because the £800 is less than your £900 allowance. You can apply for a tax refund of whatever tax you pay on £100 of income.

Hi Ronald, that info is quite useful for me as well (I get a car allowance, paid as salary and taxed as paye, as well as business and private fuel paid for, for which my company deducts 35 per month from my car allowance and is not shown on any wage slips......don't know the legality of this!). Sorry to be a pain, but where did the 10p per mile for private fuel come from? Is this a set government figure or is it based on mpg and private fuel usage?

Regards, Ian

The latter. My example supposed he did 8000 private miles in which each mile involved an average of 10p worth of fuel. For eaxmple a bit over 40mpg would work out at about 9 miles per litre, and at 90p per litre that makes 10p per mile.

It has been 40p per mile for a good few years now, when are they going to up the rate. We can't have all those tax inspectors not being reimbersed for all their expenditure when they have to make business trips, not to mention MP's.

Kevin

That would only discourage us from reducing our carbon footprints, so it would not be very politically consistent. If anything they should bring the rate down.

I can't see MP's or civil servants agreeing to that. An MP or a government employee subsidising the Government. MP's at least are out to screw every last penny out of the system. I didn't see Ken Livingstone out planting trees after his recent jolly to Cuba by the way.

Kevin