Employee Mileage Payments and Self Assessment

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Employee Mileage Payments and Self Assessment

Postby planteria » Sun Aug 26, 2018 12:26 pm

having been an employee of my own company since 2004, since April last year I have been an employee of a Plc.. with my own company running alongside. with my own company I used to reimburse myself for all fuel costs, tyres etc. rather than claim a mileage payment. But now my employer pays me 22p/mile.

I am looking to complete my Self Assessment online and I have received some conflicting information from colleagues. Some are saying that we can claim up to the thresholds below, but a couple of them are saying that HMRC only pay 20% of the below :problem: .. that doesn't seem right to me.

Type of vehicle First 10,000 miles Above 10,000 miles
Cars and vans 45p (40p before 2011 to 2012) 25p
https://www.gov.uk/expenses-and-benefit ... es-for-tax

can i claim 10,000m x 23p and further miles for the tax year at 3p? or are employees only entitled to receive a portion of this? I have entered what I think is the correct information on my self assessment - which I haven't submitted yet, but the calculation so far seems to suggest that I would only receive a small portion of the 23p/3p.

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Re: Employee Mileage Payments and Self Assessment

Postby Constantine » Sun Aug 26, 2018 1:17 pm

It's quite simple really. (But then I am an accountant.:))

You claim a net 23p a mile as an expense on your SA return.

As a result, your taxable income will be 23p less, and your tax bill will be reduced by 4.6p, Assuming you are a 20% taxpayer.

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Re: Employee Mileage Payments and Self Assessment

Postby pabenny » Sun Aug 26, 2018 3:24 pm

I concur with Constantine.

The 23p /mile is a deduction against your taxable income, not against the tax payable. Some people mistakenly assume that the 23p/mile comes off your tax bill - hence an element of confusion and misinformation.

Because it's a deduction against your taxable income, the benefit is indeed 4.6p as Constantine says.

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Re: Employee Mileage Payments and Self Assessment

Postby planteria » Sun Aug 26, 2018 5:29 pm

thank you both.. and i understand.

but it makes a mockery of the 'we pay 22p, but you can claim the rest from HMRC' line.. some companies just pay the 45p :eh:.

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Re: Employee Mileage Payments and Self Assessment

Postby hugginhill » Sun Aug 26, 2018 6:51 pm

"Since April last year I have been an employee of a Plc.. with my own company running alongside"

This makes no sense. What is the arrangement?
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Re: Employee Mileage Payments and Self Assessment

Postby planteria » Sun Aug 26, 2018 10:34 pm

doesn't it?

i have two roles. I work for a company. and i run my own company alongside.

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Re: Employee Mileage Payments and Self Assessment

Postby pabenny » Mon Aug 27, 2018 9:18 am

The 45p/mile permitted by HMRC is fairly generous. IIRC, it's based on the full cost, including depreciation and financing, of running something like a Ford Focus, purchased new and replaced on a 3-4 year cycle.

That said, 22p/mile is rather mean, given that fuel alone costs about 2/3 of that sum.

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Re: Employee Mileage Payments and Self Assessment

Postby planteria » Mon Aug 27, 2018 11:01 am

agreed. the company head office is in Yorkshire.
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Re: Employee Mileage Payments and Self Assessment

Postby blythburgh » Mon Aug 27, 2018 11:14 am

planteria wrote:agreed. the company head office is in Yorkshire.


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