Milage expenses

[Le Chat]

I hope this is in the right section! I use my own car for work. I am an estate agent, who gets paid 25p per mile expenses. I have been informed by a friend that I can claim 15p per mile, on top of this as extra from the Inland Revenue as the proper paid amount per mile should be 40p.
Nobody at work (and we have an accountant) has mentioned this. I have googled it but it's such a minefield of forms and link clicking that I can't make head nor tail of it. Does anyone know how this works and what form I need to request? Cheers.

[jb190281]

have a look at this

http://www.hmrc.gov.uk/rates/travel.htm

[Buenchico]

There's no 'proper' amount for mileage. An employer can pay UP TO 40p per mile (for the first 10,000 miles - and then 25p per mile) without HMRC regarding the payment as taxable income.

However the strange way that HMRC's system works means that they start by counting every single penny you get from your employer as taxable, then knocking off 40p per mile to find out what you must pay tax on. Since you only receive 25p per mile, that means that an extra 15p per mile should be taken off your taxable income. Assuming that you're paying income tax at the standard 20% rate, that means that (if you're not already getting the relevant tax relief), HMRC will owe you only 3p per mile, not the 'missing' 15p per mile which your question refers to.

Contact your local tax office for the relevant paperwork:
http://search3.openob...or/locator.jsp?type=1

Chris

[Panic Button]

25p a mile? They are having a laugh.

Presumably you realise that you need insurance that allows you to drive on business, not just social domestic and pleasure. If not they might refuse to pay out for repairs.

[Le Chat]

Thanks for your replies. Nice clear answers. I actually understand now!! Panic button...yes they are having a laugh but either you accept it or you leave, that is what it is like! x

[boxtops]

We only get 27p per mile for business miles. As buenchico says the company can pay what it likes. Most of us have managed to get "employers' business" cover at either no additional charge or a very small extra premium - but we are not on the road all day, only going to pre-arranged meetings etc. Agree you should check buenchico's link, I have found the tax office very helpful when I have had queries.

[Le Chat]

My firm does not include the milage paid actually on the wage slip...we get paid this as an extra amount on our cheque. (Yes, very antiquated!) So how does the firm reflect this in their book keeping? Is it somehow more beneficial for them to do it this way at the employees' detriment?