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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I recently was made redundant and have been informed that as

Resolved Question:

I recently was made redundant and have been informed that as my place of work was home I can claim the difference my employer paid for business miles compared to the hmrc site. From my understanding over the last 4 years the amount to be refunded can be quite substantial.

My concern is that in 2012 my father decided to sell his property and retire abroad and gave me a significant amount which has boosted my savings. Are there any tax implications?
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi

Thanks for your question, my name is XXXXX XXXXX I am one of the UK tax experts here on Just Answer.

Can you advise
1) Did your contract state that you worked from home
2) What was your role - that saw you travelling and working from home
3) Was there an office to work from near to your home that you could have worked from
4) What amount did your employer pay you per mile for business miles, and how many miles did you approx. undertake each tax year

The capital sum your father gave you has no tax implications, but any income earned from the savings (such as interest)are liable to tax, but this is normally deducted from source, where necessary by the bank/building society. It only had additional tax consequences if your income for the year was in excess of £42,475 (so breaching the basic tax rate band) so could you advise
5) What interest you earned (approx.) in 2012/2013
6) You annual income for that same year


Thanks

Sam
Customer: replied 2 years ago.
1. Yes officially based at home
2.Regional manager covering Uk South.
3. Head office was based 50 miles away
4. Paid 15p per mile , approx business miles 17,000
5,interest on savings approx 1.6k
5. Salary is 50k , plus redundancy of 50k

Thanks
Expert:  Sam replied 2 years ago.
Hi Simon

Thanks for your response and the information requested.

Looking at the mileage position first, then yes there is a tax refund to be had, as you used your own car and HMRC rates would allow 45p a mile for the first 10,000 miles and then 35p a mile thereafter.

So on 17,000 miles -
10,0000 x 45p = £4500
7,000 x 25p = £1750
Total claim per year £6250 x 40% = £2500 refund
So its worth putting claim in - usually I would recommend claiming on a P87 expenses claim form, but as the claim is more than the permitted limit for the P87 AND you will attract additional tax on the year of redundancy - due to the lump sum payment and the fact you have interest that will attract further tax (as would only have suffered 20% basic rate tax, and should be charged at 40%)this works out to be approx. £320 you will owe (which will be deducted from the refund that arises for the mileage claim) you will need to complete self assessment forms.

To do this, you can either telephone HMRC to advise that you
1) Wish to claim mileage expenses for the last 3 tax years
2) Have interest, that due to your level of income, will need further taxation for 2012/2013 and possibly 2013/2014
3)Have additional monies paid in the form of redundancy for 2013/2014, that may need additional tax considered on the taxable element
so they can issue the appropriate self assessment tax returns OR

You can register for self assessment online, and I have provided a link here for you to do this.

https://online.hmrc.gov.uk/shortforms/form/SA1?dept-name=&sub-dept-name=&location=43&origin=http://www.hmrc.gov.uk

If you need any assistance with completing these, once they have been issued, then do come back to Just Answer, and I would be happy to assist with this, just ask for Sam Tax in your opening post.

In the meantime if you have any follow up questions, please do let me know.

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13698
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you
Expert:  Sam replied 2 years ago.
Hi

I do apologise - the HMRC rates are 45p a mile for the first 10,000 miles then 25p a mile (not 35p a mile - my finger slipped !)

Thanks

Sam
Expert:  Sam replied 2 years ago.
Hi Simon

I hope you were able to register for self assessment without any problems. Let me know if I can be of any further assistance.

Thanks

Sam

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