Car Allowance Tax
Probably not the right place to be asking this question but i bet somebody has the answer or can point me in the right direction:
My GF currently recieves a car allowance which is a monthly payment of £400 and is taxed at her normal rate which gives her about £280 a month after tax.
Any mileage she racks up for business she can claim back at 0.11p per mile from the company she works for.
The thing is i know the Inland Revenue allow you to claim up to 0.40p per mile, is there anyway she can back the difference? or some of the difference?
The easy answer to this is to just dump the car [ if possible ]
They are a massive tax burden to put up with. Unless you are doing the required milage [ and more ] most company car owners unless you are sticking rich end up out of pocket if you can work out how much it would cost you.....
I have point blankly refused company cars in the past with jobs. [ Give me a mbike any day of the week, rain or shine !! ]
I get the 40p/mile but I don't get the lump sum allowance.
AFAIK its one oo the other as far as the Inland Revenue is concerned.
If you don't so many real miles for the company, then the lump sum route is best for you.
If you do lots of miles then no lump sum plus higher rate is better.
In previous job if you did LOTS of miles the rate dropped anyway after a number of miles.
At the end of the day, its up to the company how much they give you - then its up to the inland rev as to how much they ask for in tax :)
PS So in answer to your question - no :(
You can claim up to 40p per mile for the first 10000 miles and 25p a mile there afterwards from the Inland Rev for business mileage using a private car for business purposes. Your GF will have to go self assessment :eek: to claim the difference between what her company pays her and the Inland Rev allowances.
They will normally then adjust her tax code the following year although i think she can claim it as a lump sum.
Another govt tax fudge as most people are not aware they can claim or can't be bothered with self assessment.
Jeez i sound like an accountant...
Just to throw in another issue, if your using a private vehicle for buisness purposes you need to make sure your insurance covers you to do so....