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TonyTax, Tax Consultant
Category: Law
Satisfied Customers: 15976
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My UK employer gives me a nominal car allowance so that i

Customer Question

Hi there. My UK employer gives me a nominal car allowance so that i use my personal vehicle for business travel.
Because i receive this monthly allowance they only allow me to claim the reduced HMRC mileage rate for company cars, for my business miles. So the £90 per month car allowance means i claim 12p per mile rather than 45p per mile for personal car users. The car allowance is £90 per month and i cover about 800 miles. I can't opt out of the car allowance. Is this legal?
Submitted: 1 year ago.
Category: Law
Expert:  TonyTax replied 1 year ago.


The most that an employer can pay an employee in terms of a tax free business mileage allowance is 45p per mile for the first 10,000 miles and 25p per mile thereafter. As you receive less than that, then you are entitled to claim tax relief on the difference between 45p and 12p per business mile. You don't have to take the cash from your employer though I don't know anybody who would turn down tax free cash but you cannot claim capital allowances for your car.

I ope this helps but let me know if you have any further questions.