Cash for car allowance

[Rory]

From recollection this figure works out to a further 13p per mile, meaning that in total you should get compensated about 40p per mile for business miles (using a 2.0l petrol car as an example)

It depends how much the mileage allowance is from the company.

If he's getting 26p mile then for the first 10K miles he can claim back the tax on the difference between that and HMRC rate of 45p which is 19p BUT you only get the tax back, so a 40% tax payer gets 7.6p, a 20% tax payer only gets half of that.

Over 10K miles the HMRC rate is 25p so strictly speaking he should be paying tax on 1p per mile.

 

[Dieselman]

Management. Have voted

Thanks, the more the merrier.

Interested to see where this is going, DM...

It's just a question after something I was told the other day from a very senior source.
I wanted to see if marketplace reality matched what I was told.

 

[NISFAN]

Aren't some on here quoting some really old tax rules?

AMAP rates have nothing to do with a car being Petrol, Diesel, 1.5 litre 500 litre, etc. you simply get 45pence per mile for the first 10k then 25ppm thereafter. These rates apply for using your own car for business travel. If you carry a company passenger you are allowed to add 5ppm to the above.

If your company doesn't pay those rates, then you either claim the remainder in tax relief (if underpaid) or pay the tax on the overpayment, as has been said.

 

[Dieselman]

If you carry a company passenger you are allowed to add 5ppm to the above.

I've been forgetting about that.

 

[Bobby Dazzler]

4307 business miles in 2011-12 tax year, and 3048 the year before. I know that having filled in my P87 yesterday

Don't forget to add those professional qualifications when filling it in.

 

[@MARK]

Aren't some on here quoting some really old tax rules?

AMAP rates have nothing to do with a car being Petrol, Diesel, 1.5 litre 500 litre, etc. you simply get 45pence per mile for the first 10k then 25ppm thereafter. These rates apply for using your own car for business travel. If you carry a company passenger you are allowed to add 5ppm to the above.

If your company doesn't pay those rates, then you either claim the remainder in tax relief (if underpaid) or pay the tax on the overpayment, as has been said.

But if you get a car allowance then you are not entitled to the HMRC private car mileage rate as the company has already made a contribution to the running costs thus the additional rates based on engine size etc.

 

[Palfrem]

But if you get a car allowance then you are not entitled to the HMRC private car mileage rate as the company has already made a contribution to the running costs thus the additional rates based on engine size etc.

You are, because you pay Tax and NI on the car allowance

 

[@MARK]

You are, because you pay Tax and NI on the car allowance

HMRC view it very differently thus if your company pays you a "car allowance" rather than just upping your salary in lieu of a company car then if your company then choose to pay you the 45ppm rate, that too will become taxable.

Loads on info on the HMRC website but for mileage rates they view a car allowance as the same as having a company car.

 

[Dieselman]

I believe it is accounted (and therefore taxed) differently hence the different rate.

Earning £50k per annum against earning £40k per annum plus a £10k car allowance will see a different take home value.

The gross payment of the allowance is taxed just as pay is, then the additional fuel payment is added in as well and taxed the same.
Each mile driven gives tax relief at the set values, so a rebate is made at source against the payments.

 

[Palfrem]

I get a separate line called "car allowance" (non pensionable) and it just gets added into my gross pay and it all gets taxed the same.

 

[Rory]

HMRC view it very differently thus if your company pays you a "car allowance" rather than just upping your salary in lieu of a company car then if your company then choose to pay you the 45ppm rate, that too will become taxable.

Loads on info on the HMRC website but for mileage rates they view a car allowance as the same as having a company car.

I've no idea what you're thinking of there.

Car allowance is separated out of gross pay so it doesn't count for pension etc, but you still pay tax and NI on it. Companies can pay whatever they like for mileage and it's only taxable if it exceeds the HMRC mileage related 45p/25p limits.

 

[Ricardo]

Coming up to my 1st full year doing bigger miles after opting out of scheme

Averaging 31k miles pa currently my iPhone app shows the car is costing 16ppm in fuel to run and about 5 ppm in repairs to date mpg 40.18 on the s211 220cdi

After decent allowance and 21ppm business miles + no bik and the hmrc reclaim (why are people saying you can't do this.. I've had almost 4 figures back for 4 months use......)

It's working out fine for me

Car limit is 5 year max, car was bought on decent mb pcp at 2.5 year old and 50k, I hope to take it to 140k and ballon of £5500 which is good and low

Not doing many private miles in this currently... They go on the wife's around town..

Oh and forgot Regional Sales Manager

 

[MarriedBlonde]

I'm self employed, office is at home but i spend atbleast 4 days a week on site. I just claim a mileage allowance from myself.

J.

 

[230K]

Hi

We get a car allowance of £7900/year and 17p/mile diesel or 18p/mile petrol.

My yearly can vary from 3000 miles per year to 36000 miles per year so havent voted because of the variance.

Hope this helps

230k

 

[Londonscottish]

I am account manager but never drive on business. That's what trains are for.

I take the allowance and buy something interesting with a large V8.

 

[MicB]

I do about 5k-6k business miles each year pottering around Oxfordshire. I claim £1.00/mile to cover the ACTUAL cost of motoring plus the tax that I incur on the element of cost over and above HMRC allowable tax free rates.

Mic

 

[mct_cars]

I used to have a company car but gave it back as it became too expensive to run. Our scheme also meant I had to pay for Private use, and only claim 12p per mile, although everything except fuel was paid for.

We don't have the option of an allowance, so I now get hire cars when I need - probably about 15k mileage a years worth. The train is also an option (certainly Newcastle to London), but takes far too long and far too unreliable going east to west.