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HMRC rules on milage


Wb123
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In a **** turn of things the other half is out of work and i have six months a 70 mile round trip away plus a 25% pay cut.

 

Work say were it an 80 mile round trip they would pay milage, but they wont at 70. Over the six months it looks set to total about 9000 miles so a not inconsiderable expense. Obviously i am negotiating on this.

 

If they refuse to budge are HMRC likely to let me claim tax back on the difference between 0p per mile and the standard rate with just my word on journeys or do i need to ask my employer to process claims at a 0p rate?

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45p for 1st 10k miles the 25p there after.If you employer pays 20p then you can claim tax relief on the difference.

It's advisable to keep a mileage log & receipts in case HMRC request them (rarely)

The biggest grey area is where you are traveling,as you can't claim from your home to your normal place of work.If work are sending you somewhere else then your fine.

I'm popping into work for an hour in the morning.If I get time I'll copy & paste the HMRC guidance.

 

Remember though you cnt claim the full amount it's relief you get so as an example say your emp pays 30p per mile for 1st 10k.Then you claim relief on 15p @ 20%.

Edited by Davyo
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If you employer pays you £0 then you can claim 20% of 45p for 1st 10k the 20% of 25p.If your self emp then it just goes on your expenses page.

As said before 'travel to your normal place of work is private mileage and you can not claim.If that was the case everyone that used a car/bike would be claiming relief.

Claim through your PTA (personal tax account) iform P87

Edited by Davyo
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Interesting. My accountant told me I may be better off by keeping a mileage log than simply keeping all receipts and claiming it back through expenses.

 

If you're self employed you can choose to either claim the business use percentage of the actual expenses, or work out the amount to claim using the official mileage rates

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In a **** turn of things the other half is out of work and i have six months a 70 mile round trip away plus a 25% pay cut.

 

If you're travelling to the same place everyday for work, it will almost certainly be viewed by HMRC as normal commuting and you won't be able claim anything

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If you're travelling to the same place everyday for work, it will almost certainly be viewed by HMRC as normal commuting and you won't be able claim anything

He will have to get a letter from his employer regarding his temporary placement stating it not his normal place.
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If you're travelling to the same place everyday for work, it will almost certainly be viewed by HMRC as normal commuting and you won't be able claim anything

 

This is where it gets complex.

 

Clearly they have had this debate with hmrc as they get milage over 40 miles through without tax or insurance. The only contract i will have however will be with the new distant site.

 

Hopefully a letter explaining the temporary placement will do the trick - thankyou Davyo.

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I used to claim upto 15,000 miles a year. It only applied as my company's office was in Cheltenham but I was based in a different location every day travelling all over Wales.

 

Is it just this one location you work?

 

Best thing is speak to an accountant who actually knows what they're doing.

 

You can do it yourself, but I and many colleagues used to find it much easier to pay an accountant £60 and he'd sort everything.

 

People who did it themselves often had HMRC asking for all sorts from them, ours always went through smoothly.

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Sorry a bit rushed,

 

A company car does not count as their own vehicle

Business travel - This is travel that is essential to their work and is in the performance of the duties of the employment.

Ordinary commuting - This is travel between home and a permanent workplace. A deduction is not due for ordinary commuting. From 6 April 2016 for employees of umbrella companies and agencies each separate job/engagement is no longer classed as a temporary workplace and the travel to and from that workplace is ordinary commuting

If an employee uses their own vehicle for business travel they may receive mileage allowance payments from their employer. If so, they can receive some or all of the payments free of tax and National Insurance contributions (NIC).

Payments received that are within the approved amount are called approved mileage allowance payments and are non-taxable.

Passenger payments

Passenger payments are not treated as mileage allowance payments.

Employee paid more than the approved amount

If an employee receives mileage allowance payments of more than the approved amount they will have to pay tax on the excess. They will do this through their tax code and through self assessment if they receive a tax return.

Employees paid less than the approved amount

If the employee does not get mileage allowance payments or is paid less than the approved amount they are entitled to mileage allowance relief.

Employees can use form P87 to get tax relief for their employment expenses. They must use a separate form for each period of employment during the tax year - 6 April to 5 April.

P87 or SA return

Where a P87 has claims of more than £2500 set up an SA record or re-open a dormant record and send a tax return next April for this tax year (CY). If the claim is for a previous year (CY-1) or earlier send a tax return for that year if we have not already sent a return for that year.

What expenses can employees get tax relief for

Travelling expenses on business mileage

Employees can get tax relief for business mileage done in their own vehicles - cars, vans, motorcycles or cycles. This is known as mileage allowance relief. They should keep a record of their mileage in order to calculate the amount of relief to which they are entitled. If an employer makes a contribution to business travel expenses, it is deducted from the allowance.

Calculating relief

For the relevant tax year the employee must

  1. add up the business miles they have travelled, other than as a passenger
  2. multiply their business miles by the statutory mileage rates to calculate the approved amount
  3. add up all the mileage allowance payments received from their employer
  4. compare mileage allowance payments received with the approved amount.

If the approved amount is greater, they are entitled to mileage allowance relief on the difference.

Getting relief In writing

The employee must request relief by providing details in a letter or completing form P87 where

  • it is their first request for mileage allowance relief and they do not get mileage allowance payments from their employer.
  • a form P87 has already been issued to them
  • the request relates to a year before the previous tax year.

By telephone

A request can be made by telephone where

  • form P87 has already been completed and entitlement to mileage allowance relief has been established in principle
  • it is their first request for mileage allowance relief and they
    • get mileage allowance payments from their employer
    • can provide an exact amount of business mileage

· From the 6 April 2012 Pay As You Earn (PAYE) customers who do not file a Self Assessment Return have four years to send us their repayment claims

From the 6 April 2012 Pay As You Earn (PAYE) customers who do not file a Self Assessment Return have four years to send us their repayment claims

Tax year

claim deadline

2013-2014

5 April 2018

2014-2015

5 April 2019

2015-2016

5 April 2020

2016-2017

5 April 2021

2017-2018

5 April 2022

 

BIG GREY AREA IF EMP PAYS NO CONTRIBUTION (THIS HAS RECENTLY CHANGED SO PLEASED I CHECKED)

Travel & Subsistence

  • where there is re-imbursement
  • This may include mileage without a company car, bus/rail/air fares, hotel costs

Claims where there is no re-imbursement should be refused except for claim for carers

 

REFUSE CLAIMS FOR General Motoring

  • for example: vehicle tax, tyres, MOT, insurance, parking costs and motoring fines, valeting, car servicing and maintenance
Edited by Davyo
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bit more info

Passenger payments

An employee may receive payments for carrying business passengers in their own or a company car or van. There is a maximum amount they can receive for each passenger that is free of tax and National Insurance contributions (NIC).

For the payments to be free of income tax and NIC, the

  • passengers must be fellow employees, and
  • journey must be business travel for them.

The employee will pay income tax and NIC on any payments above the approved amount. The approved amount is the total of the amounts calculated for each passenger.

Relief

The employee is not entitled to any tax relief if they receive less than the approved amount for passenger payments in a tax year.

 

type of vehicle

business miles*

rate

car or van

up to 10,000

45 pence

after 10,000

25 pence

motorcycle

all

24 pence

cycle

all

20 pence

passenger rate for **cars and vans

5 pence

* For NIC purposes only, use the up to 10,000 miles rate for all business miles travelled in a privately owned car or van

 

Remember that SCOTISH RATE BANDS ARE DIFF FROM UK 17/18 20%-40%

 

UK income tax and dividend rate bands (excluding Scotland)

2017-2018

income tax rate bands UK

band

rate

tax band

basic rate

20%

£1 - £33,500

higher rate

40%

£33,501 - £150,000

additional rate

45%

£150,001+

dividend rate bands

band

 

 

Scottish income tax and dividend rate bands

2017-2018

income tax rate bands SCOTLAND

band

rate

tax band

basic rate

20%

£1 - £31,500

higher rate

40%

£31,501 - £150,000

additional rate

45%

£150,001+

dividend rate bands

band

Edited by Davyo
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What are the rules on relocation, in terms of distance v. redundancy? I'm assuming that if a company closes an office in one location and moves, say, 5 miles down the road then all employees are expected to start working at the new location and therefore keep their jobs. If they refuse to travel to the new location, they are resigning in effect.

 

But if that same company did the same, and the new location was 100 miles away, surely that is effectively making people redundant unless those workers willingly accept the job in the new location, and either travel a long distance or move?

 

How far does the distance have to be when the same job becomes a different job, due to proximity from the original place of work/job?

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What are the rules on relocation, in terms of distance v. redundancy? I'm assuming that if a company closes an office in one location and moves, say, 5 miles down the road then all employees are expected to start working at the new location and therefore keep their jobs. If they refuse to travel to the new location, they are resigning in effect.

 

But if that same company did the same, and the new location was 100 miles away, surely that is effectively making people redundant unless those workers willingly accept the job in the new location, and either travel a long distance or move?

 

How far does the distance have to be when the same job becomes a different job, due to proximity from the original place of work/job?

I'm not in work now but as far as I am aware (without checking guidance).They you employer can pay you a relocation grant to an amount that is tax exempt.Think is just over 9k anything higher attracts tax but I'd need to check the guidance to be honest.

Regarding mileage you employer should put in place a package to cover fuel cost but that up to the employer.For example our office is moving 28miles in 2020 and a 2yr deal has been put in place for our staff (excluding me as I'm done in October 2017)

You will also find that employers try and get rid of staff through what they term natural wastage before offering packages.

Edited by Davyo
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