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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15916
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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UK Tax Question : I currently am receiving a car allowance

Resolved Question:

UK Tax Question :
I currently am receiving a car allowance as part of my salary package. Can you tell me if I am allowed to claim the difference in mileage repayment from my employer, and what the HRMC allow from Mileage Allowance Relief i.e. employer pays 12p per mile, but I could claim 45p minus 12p as part of the Mileage Allowance Relief. Also, is this applicable also if I have a company car?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. The car allowance has nothing to do with a claim for business mileage tax relief. It's simply extra salary taxed through the PAYE system. Use the P87 here to claim tax relief on the difference between the HMRC limits (45p per mile for the first 10,000 business miles and 25p per business mile thereafter) and what your employer pays you, one for each tax year that you wish to claim for. If the claim is for more than £2,500 in expenses for any one tax year, you will need to register for self-assessment. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
So this applies if you take a company car too? You would simply work out your annual business mileage and difference with what your employer pays you?
Expert:  TonyTax replied 1 year ago.
No, it doesn't. The point of the 45p/25p figures is that they are deemed to cover the running costs of a private car (excluding finance costs) and the depreciation caused by using it for business travel. If you had a company car, you would not be funding the running costs and depreciation. The rates for company car users are here.
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Customer: replied 1 year ago.
That has cleared up my query. Great advice.
Expert:  TonyTax replied 1 year ago.

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