Car allowance and mileage claim?

Question

Hello all

Have a question on my car allowance and mileage claims. I use my own car for work purposes and for the last 2 years have received £450 per month and 16p per mile with a diesel. I have never claimed anything else other than this from my employers. Now i have recently changed jobs and been offered £420 per month as an allowance and 11p per mile. how do i go about reclaiming the rest of the allowance as i believe i should get 40 per mile for first 10000, then 25p after with a P87 form, can i backdate this form ? how much will this mean to me in real money terms when i make the claim or will it just increase my tax code ?

Sorry for all the questions but everyone i ask at my new work place seem to claim different amounts from 35 per mile down to 11p per mile so i am very confused and after looking at the P87 form i am now even more confused.

Thanks in advance

Answer 1

Yes, you can complete a P87 going back 6 yrs if you want. You will be claiming the difference between what your employers have paid you in terms of mileage allowance and lump sums and the 40/25p pm you have quoted. You will get a refund in the form of a cheque from HMRC but I can't tell you how much without seeing your claim.

Answer 2

as suerye said above, but what they normally do is amend you tax code each year to take into account this claim and therefore you would pay less tax than normal due to you receiving the money back from the claim each month in your pay.

if you ask nicely they may give you a lump sum refund, but depends on how much it is.

note, as you say you are entitled 40p/25p per mile, however an employer is not obliged to pay this amount. if however they want to pay more than this amount, they have to apply to the Inland Revenue with all the details and reasons why in order for it to be approved.

note 2, you will not get the difference owed to you, you will only get the tax element so if the diff is say £100 and you fall into the 22% tax band, you will get £22 back.

Answer 3

Both the above are right.

The fact of the tax code changing to allow for the allowance is down to the employer/employee to decide. HRMC do not automatically just do this without it being requested

Mileage figures varies all over the place.....it depends on the funds of the company but their is no law to say they should pay the employee anything for their personal car use. Most employers who do pay are from large firms.....and they claim it all back in their end of year accounts