Company Car fuel expenses

[mjones2006]

Hi all,

 

We recently had a tax inspection at my work and it turns out that we have been paid to much for our fuel allowane. The tax said we are only allowed to claim 9p per mile but after working this out even for a diesel it would cost more than 9p a mile at 40 MPG i am currently in a pertol and it work out it costs me 13p per mile which means if i from now on only get 9p i am paying to use my company car for work purposes. Also if the employer wants us to pay for the overpayment we have supposably been given do we have to?

 

 

Thanks

Mark

[Lusky]

I'm a bit confused about this, the Inland Revenue guidelines state that you are allowed to claim tax free 40p per mile for the first 10 000 miles a year and 26p per mile thereafter.

 

Some companies may have alternative schemes based on the size and type of your engine and a company does not have have to pay you as much as the Inland Revenue states but you can then claim the rest via the Inland Revenue yourself. I sounds as though your comany have made some sort of mess of it and I would certainly question any attempt they might make to make you pay it back.

[mjones2006]

I'm a bit confused about this, the Inland Revenue guidelines state that you are allowed to claim tax free 40p per mile for the first 10 000 miles a year and 26p per mile thereafter.

 

Some companies may have alternative schemes based on the size and type of your engine and a company does not have have to pay you as much as the Inland Revenue states but you can then claim the rest via the Inland Revenue yourself. I sounds as though your comany have made some sort of mess of it and I would certainly question any attempt they might make to make you pay it back.

 

 

Hi

 

Sorry for the confusion i am referring to a car provided by the company not my own car that i use for work purposes which entitles you to 40p

[Movingon]

For any car, you are allowed to claim 13p per mile in "mileage allowance". Go to the inland revenue's website; all the regulations are there. However, you are only allowed to reclaim the tax against 13p per mile on PETROL cars, for mileage which your comany DOESN'T pay mileage allowance for. For Diesel cars, this is 9p.

 

So - you drive 150 business miles one day in your petrol company car and submit a travel claim to your company. However, under company rules, they only pay you for 100 of those miles, for whatever reason. (There are several reasons they might do this). They can pay you anything up to 13p per mile for the 100 miles of travel to cover your costs. (My company pay 13p for all cars regardless of fuel).

 

At the end of the year, you write to the inland revenue stating that your company only paid for 100 of your 150 business miles... and you require income tax relief on the remaining 50. If you had been driving a Diesel car, this relief is granted on 9p per mile. As you were driving a petrol car, this relief is granted on 13p per mile - so you will get back 22% of the 13p, per mile, for 50 miles.

 

 

This may take some explaining to your tax office with reference to various documents (available on the revenue website) which I have now lost; I haven't had a company car for over a year. Tax offices don't know about this much because not many people claim it.

[Movingon]

Oh, and P.S. if your company try to enforce these rules you must

• research the many many documents available on the Revenue website relating to company car travel.
  
• write to your company explaining that you believe they have made a mistake and that show that you're entitled to 13p per mile.

Anyway - the revenue can't tell your company how much they can pay in fuel allowance; they can only tell them how much fuel allowance they will get tax relief on... so what your company is saying is that they don't want to pay mileage allowance at 13p per mile because for diesels the tax relief is only given up to 9p... but for petrols it is given up to 13p per mile.

 

Can you tell I got to know these regulations quite well?

[mjones2006]

For any car, you are allowed to claim 13p per mile in "mileage allowance". Go to the inland revenue's website; all the regulations are there. However, you are only allowed to reclaim the tax against 13p per mile on PETROL cars, for mileage which your comany DOESN'T pay mileage allowance for. For Diesel cars, this is 9p.

 

So - you drive 150 business miles one day in your petrol company car and submit a travel claim to your company. However, under company rules, they only pay you for 100 of those miles, for whatever reason. (There are several reasons they might do this). They can pay you anything up to 13p per mile for the 100 miles of travel to cover your costs. (My company pay 13p for all cars regardless of fuel).

 

At the end of the year, you write to the inland revenue stating that your company only paid for 100 of your 150 business miles... and you require income tax relief on the remaining 50. If you had been driving a Diesel car, this relief is granted on 9p per mile. As you were driving a petrol car, this relief is granted on 13p per mile - so you will get back 22% of the 13p, per mile, for 50 miles.

 

 

This may take some explaining to your tax office with reference to various documents (available on the revenue website) which I have now lost; I haven't had a company car for over a year. Tax offices don't know about this much because not many people claim it.

 

 

Thanks, on more thing the company is saying is that if they do pay us over the 9p per mile for diesel then the tax will see it as a benifit in kind and charge us tax on that. Is this correct.

 

Thanks Again

Mark

[Movingon]

Yes, that is what they're saying; but no, they are not correct in the case of petrol cars. For petrol cars, the benefit in kind threshold is 13p.

[mjones2006]

Yes, that is what they're saying; but no, they are not correct in the case of petrol cars. For petrol cars, the benefit in kind threshold is 13p.

 

i see but i will be gettin a diesel car soon and all the others are diesel so basically we will be gettin taxed on something that is actually used for business purposes as 9p per mile does not cover th actual cost of fuel

[Movingon]

It always did when I used my company Focus 1.8TDCi... but then I drove it like an old grandmother so that the money DID cover the fuel.

I was getting about 6p/mile I think.

[mjones2006]

It always did when I used my company Focus 1.8TDCi... but then I drove it like an old grandmother so that the money DID cover the fuel.

I was getting about 6p/mile I think.

 

 

doesnt seem right this, for us to get 45MPG we would have to be doin alot of motorway driving but i as we do alot of local stuff we are always stopping and starting so to get 45MPG seems impossible. But if its the law then not much i can do

[mjones2006]

This topic was closed on 09 March 2019.

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