P87 - Tax Relief for Expenses

[rachmc]

Does anyone have any ideas about what exactly you get for this? Is there a lump payment for example? My husband has just worked out he did 18000 miles tax year ending 2007. Thats 10000 at �0.40 and 8000 at �0.25. That is �4000 add �2000 = �6000. But what do they do with that figure and what will he actually get?

[Ethel]

It simply means that income tax is not paid on �6000.

Assuming he pays tax at 20%, he will pay �1200 less tax; or �2400 if he pays tax at 40%

[factor-fiction]

Was it genuinely business mileage? That doesn't include travel to/from normal place of work. If it was genuine business mileage he can claim tax relief on the amount you calculated less the amount reimbursed by the employer. If the employer paid nothing he can claim tax relief on the full amount.

But I�d be surprised if he had incurred all that cost and the employer had paid nothing.

Is it a company car ? If the employer has paid for the car then I can't see him being able to claim a tax allowance unless he paid the petrol and wasn't reimbursed by his employer. In fact he will have to pay tax on the car benefit as it is assumed he has had private use of the car unless he returns it every night.

Where relief is due he should contact the tax office. He may get a lump sum. Going forward an adjustment would be made to the tax code.

But as I say, it seems odd that he hasn�t been reimbursed and was expected to pay all these costs himself.

[rachmc]

He was reimbursed only �20 a week. He drive in hisown car. He lives in Sheffield but works all over London and other far away Lands(!) every week Monday to Friday as a steel erector. This is how he build up so many miles. He could easily stay there and never come home but I wouldn't be too happy with that!

[Ethel]

He has been reimbursed �1040 - that makes it very different.

Take the �1040 off the figures I have already given - and the difference is the amount of rebate he will get.

[factor-fiction]

If he gets �20 week is that cash in hand or is he taxed on it?
He may be able to claim tax relief on the �6000 you calculated less the �1040 he received in the tax year.

But does he drive home every night? I think the tax man could count much of this as 'home to work' mileage as it's his choice to live so far away from his area of work.

Where is his 'normal place of work' according to his contract?

[factor-fiction]

Sorry Ethel, I type too slowly- when i start typing your responses aren't there but by the time I get round to pressing submit you've got in before me

[rachmc]

He drives to London on Monday because that is where the company he works for has got all their contracts. He has tried to change his job but all steel erector work where the cotracts are (this tends to be away). Jobs last 2 weeks to 4 months. He has to go where he is sent or no job. He has no choice other that to change his job. He has done the job for 10 years and knows nothing else. Yes. He is taxed on the �20 and it goes into his bank along with the rest of his wage. So, he does not choose to live in Sheffield and work in London. He does choose to come hoime though...every Friday!!!

[rachmc]

His company is based in Sheffield.

[factor-fiction]

You need to enquire to HMRC as I'm sure he will be entitled to an amount that is definitely worth claiming.
And as he pays tax on the �20 pw then he could still be eligible for tax relief on the full �6000.
However I think they may deduct something for the weekly trip down from Sheffield to London and back, because after travelling every week for so long I doubt he can argue his normal place of work is Sheffield.

[rachmc]

Thanks for that.