Running your own car for business

TOMROB53

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I presume that somewhere on this forum someone can explain what I can claim for for running my own car for business. I get a monthly allowance and fuel paid with deduction for private mileage, I have heard that I can claim 5p per mile if i have someone else in car with me, is this correct and what other things can be claimed ?
 

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This is the second time in a couple of days I've come across someone having fuel paid for in a private car - I'd always thought that was very unusual.

You can claim back your business mileage from HMRC at 40p for the first 10K miles and 25p for all other mileage. Note you only get the tax back, so if you pay tax at 40% then you get 40% of those figures as a rebate.

I presume (not 100% certain) that you would first have to deduct the current HMRC Advisory Rate for your supplied fuel http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm I guess that would be 13p in your case. If that's correct then your claim from HMRC would be 27p and 12p per mile.

The 5p per passenger mile is for employers who pay - they can pay you the standard rates (40/25p) tax free and can add 5p per passenger mile, also tax free. However if they don't pay you the extra 5p you can't claim it back from HMRC.
 

Alex M Grieve

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This is the second time in a couple of days I've come across someone having fuel paid for in a private car - I'd always thought that was very unusual.

You can claim back your business mileage from HMRC at 40p for the first 10K miles and 25p for all other mileage. Note you only get the tax back, so if you pay tax at 40% then you get 40% of those figures as a rebate.

I presume (not 100% certain) that you would first have to deduct the current HMRC Advisory Rate for your supplied fuel http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm I guess that would be 13p in your case. If that's correct then your claim from HMRC would be 27p and 12p per mile.

The 5p per passenger mile is for employers who pay - they can pay you the standard rates (40/25p) tax free and can add 5p per passenger mile, also tax free. However if they don't pay you the extra 5p you can't claim it back from HMRC.

Interesting points Rory. I wonder if HMRC would consider the monthly allowance, which is taxed at the individual's marginal rate, as being in lieu of 40p per mile (in that it covers the costs of running the car) and the fuel for business use is already funded? In that case they would not entertain any further claim for the use of the car in conjunction with the employer's business.

As you say, 5p per passenger mile is a private arrangement with the employer and will be taxed at marginal rate.
 

Rory

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Interesting points Rory. I wonder if HMRC would consider the monthly allowance, which is taxed at the individual's marginal rate, as being in lieu of 40p per mile (in that it covers the costs of running the car) and the fuel for business use is already funded? In that case they would not entertain any further claim for the use of the car in conjunction with the employer's business.
No - the allowance is treated simply as if it's extra salary. Both the employer and the employee pay tax *and NI* on it in the normal way.

As you say, 5p per passenger mile is a private arrangement with the employer and will be taxed at marginal rate.
No (again!). The 5p (per passenger, per mile) can be paid by the employer tax free. What you can't do is to claim an extra 5p back from HMRC if your employer doesn't pay the extra 5p.
 

Alex M Grieve

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No - the allowance is treated simply as if it's extra salary. Both the employer and the employee pay tax *and NI* on it in the normal way.


No (again!). The 5p (per passenger, per mile) can be paid by the employer tax free. What you can't do is to claim an extra 5p back from HMRC if your employer doesn't pay the extra 5p.

Your first "no" is probably a yes, in that I said in my note that the allowance is taxed at the employee's marginal rate (and NI would be a given), so you have reinforced my point but in different words. The allowance compensates the employee for the use of their car in conjunction with the employer's business. Why then should the Revenue give further relief?

To your second "no", I am impressed that there is any way the employer can supplement an employee's salary in such an informal way without it being a taxable benefit.
 

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You can claim back your business mileage from HMRC at 40p for the first 10K miles and 25p for all other mileage. Note you only get the tax back, so if you pay tax at 40% then you get 40% of those figures as a rebate.

I have a similar situation with my car - As written above, you must first deduct your fuel costs, which were reimbursed by your company i.e if your company paid an average of 13 pence per mile, you can claim tax back on the first 10,000 miles at 27p and 12p subsequently

You may be asked by the inland revenue to provide evidence of the journeys
 

Alex M Grieve

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I have a similar situation with my car - As written above, you must first deduct your fuel costs, which were reimbursed by your company i.e if your company paid an average of 13 pence per mile, you can claim tax back on the first 10,000 miles at 27p and 12p subsequently

You may be asked by the inland revenue to provide evidence of the journeys

But does your company pay you a "car allowance" as in the case of the OP Matt?
 

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This is the second time in a couple of days I've come across someone having fuel paid for in a private car - I'd always thought that was very unusual.

You can claim back your business mileage from HMRC at 40p for the first 10K miles and 25p for all other mileage. Note you only get the tax back, so if you pay tax at 40% then you get 40% of those figures as a rebate.

I presume (not 100% certain) that you would first have to deduct the current HMRC Advisory Rate for your supplied fuel http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm I guess that would be 13p in your case. If that's correct then your claim from HMRC would be 27p and 12p per mile.

The 5p per passenger mile is for employers who pay - they can pay you the standard rates (40/25p) tax free and can add 5p per passenger mile, also tax free. However if they don't pay you the extra 5p you can't claim it back from HMRC.
To get MAR (Mileage Allowance Relief) you only need to deduct the amount of money your company gives you for business miles and you claim the tax relief on the difference.

e.g you get 12ppm from your company you can claim MAR on 28ppm for the first 10K miles and 13ppm for all business miles above 10K miles
 

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I presume that somewhere on this forum someone can explain what I can claim for for running my own car for business. I get a monthly allowance and fuel paid with deduction for private mileage, I have heard that I can claim 5p per mile if i have someone else in car with me, is this correct and what other things can be claimed ?
Your monthly allowance will be taxed at whatever rate you pay, you will need to take that into account when setting your budget for leasing or personal loan. You will however be paying less tax because you don't have a company car anymore so it isn't always as bad as it first appears.
Does your company provide a fuel card for the business miles or do you claim them?
You can claim 5ppm from your company for passengers if they have it in their company car policy. As it is a tax rule I expect they will have.
 

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on this subject (in a way) i get my work through an agency. they send me all over the place to jobs. i almost always have to carry other workers and other people (usually ot british) get to use agency owned vehicles to travel to work. what, if anything, can i claim?

i sometimes get contributions towards running costs from the agency, but it often doesnt even cover the fuel to get me to the jobs, so i put the fuel in MY car, use MY car to travel to work, carrying other (often foreign) workers in MY car, and the allowance i get often doesnt cover the fuel used.
 

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But does your company pay you a "car allowance" as in the case of the OP Matt?

I get both a car allowance and the full 40/25p rates, but that's very unusual. I've heard of foreign companies doing it were they didn't realise the rate wasn't madatory. :) I'm aware of the passenger payment but we don't have a policy for that although I dare say if I claimed it, it would get paid.

In my last big corporate job, and, from other industry contacts, the pretty standard way of doing things is to pay an allowance of somewhere between £450 and £650/mth, which is in effect buying you out of your company car. As said before this is taxed in the normal way, but you do save on the tax you would have paid on having a company car.
Then you'd be paid typically 15p per business mile and would claim the tax back on the difference between that and the 40/25p rates from HMRC.
 

Rory

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on this subject (in a way) i get my work through an agency.

So are you self employed?

I've no idea if that's the case. Ask whoever does your accounts, but you should be able to offset costs against tax somehow.

You mentioned travelling to work. If it could be classed as commuting then normally employed people can't claim for that anyway, but it's all different if you're self employed and travelling to different locations.
 

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Steady on fella's ............. I'm seeing confusion between, employers offering mileage allowance ............. and individuals running a car self employed/own business ........... the rates are the same, as pointed out by Rory...... but the claimback is'nt
 

turbopete

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So are you self employed?

I've no idea if that's the case. Ask whoever does your accounts, but you should be able to offset costs against tax somehow.

You mentioned travelling to work. If it could be classed as commuting then normally employed people can't claim for that anyway, but it's all different if you're self employed and travelling to different locations.

not self employed. but i dont travel to the same place for very long. this is the longest placement ive had for a while. a whole month! i asked coz im sick of being used as a free taxi for the huge amount of migrant staff the agency has. sometimes im not even working! i just take them to work, drop them off then come home again!
 
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TOMROB53

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An update, in the past I have always claimed the 40p for the first 10000 miles and a reduced rate thereafter, the amount shown on my P11D is affected by the fact that I have a deduction for private mileage.

In my opinion to make it worthwhile using your own car for business you need to be doing around 33-37 mpg. The mileage rate hasnt changed for years despite the fact that fuel has gone up significantly eroding the mileage benefit.

On another point can you claim for the cost of breakdown recovery (AA/RAC) or the cost of SAT NAV (portable units) as these are used in connection with business rather than for popping down to the the shops ?, or even cost of tyres ?
 

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On another point can you claim for the cost of breakdown recovery (AA/RAC) or the cost of SAT NAV (portable units) as these are used in connection with business rather than for popping down to the the shops ?, or even cost of tyres ?

No - the 40/25p rates are supposed to cover all your costs. Maybe your employer would let you claim on expenses for SAT-NAV, but you'd probably buy breakdown cover anyway so that's not really a legitimate business expense.

The scheme was never designed to fund people using S320CDi's - in fact there was talk a while ago of doing away with the 40p rate but opposition from NHS staff seemed to knock that on the head. They're worse off than most as they only get mileage - there's no lump sum allowance payable as in most private sector companies.
 

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I came to that conclusion Tom ............... otherwise I would have bought a Disco ............... but need 37mpg+ to make it work !!
 

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I don't get the monthly allowance

but get 40ppm up to 10k, then 23.8ppm for the rest. I can't remember the passenger rates, but it's more for the first, and less for the others. also equipment allowance. If I have a bootful of kit, then its 1ppm I think ( again, so long since i claimed can't recall correctly).
The trick is to be the only one for miles around who can or will go where they want. That's the way I manage my boss into agreeing 40ppm for all my trips. it's still cheaper than cabbing me to the station and stumping up for a 1st class train ticket to hell and back.

I can only claim it if the trip is necessary ( i wouldn't be going if it weren't) and it is agreed in advance. They used to be able to insist that we went in our own cars, but they stopped doing that after some of the cars refused to work for a pittance. No home to office claims unless out of normal hours.

When I was in betwen cars once, they got me a hire car. Ford fiesta. Not only did they have to pay me mileage, and the cost of the car, but it took a lot longer to get me there than the classy stuff I usually drive, no dawdling from me, honest. It could barely keep up 70 on the motorway. A really false economy I thought.
Despite me thinking I lived in my car in 2000-2002, i didn't break the 10k barrier either year.
 

Axcontrols

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I do this every year - but my understanding is that the amount you can claim is based on the size of the engine.

Basically my accountant was giving me more when I used the 380SLC than he's now giving me for using the E200

68p a mile seems to spring to mind when I was using the 380 but about half as much for using the e200
 

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