Mileage allowance claim in excess of employer allowance...

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Q. I use my own car for business. My employer reimburses me 20p per mile. In 2017/18 I travelled 15,000 on business. I am a basic rate taxpayer. Can I claim any tax relief for the use of my car?  
 
There's a statutory tax exemption for Mileage Allowance Payments (MAPs), which if paid below a certain amount will not produce a liability to employees. Payments in excess of the exempt amount are taxable. The exemption does not apply to 'round sum' expense allowances. From 6 April 2011, the standard rate for cars and vans is 45p per mile, reducing to 25p per mile for mileage in excess of 10,000 miles per tax year.
 
Where the employee receives no mileage allowance payments, or the payments are less than the statutory limits, he may claim a deduction from his emoluments equal to the statutory mileage allowance, or, where appropriate, equal to the excess over the payments received.
 
As 20p per mile is less than the HMRC approved mileage rate of 45p for the first 10,000 miles and 25p per mile thereafter, you may claim tax relief as follows:
 
Allowable mileage payments:
 
10,000 miles at 45p per mile = £4,500 
 
5,000 miles at 25p per mile = £1,250
 
Total allowable £5,750
 
Less: 
 
mileage expenses received: 
 
15,000 x 20p per mile (£3,000)
 
Tax relief due £2,750
 
Note: that the amount of tax relief due is the amount on which you may claim tax relief at your marginal tax rate - it is not the amount of tax that may be reclaimed from HMRC, you will be able to claim tax at the highest rate that you are paying. 
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Added By: Sharon Worger on 11th Jun 2018 - 14:08
Last Updated: 11th Jun 2018 - 15:05

Number of Views: 365
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