Tax Return - Claiming Mileage Expenses
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Tax Return - Claiming Mileage Expenses
I was just browsing through my tax return - as you do, and I dimly remembered something about claiming the difference between the government allowable mileage expenses (40p for a car) and what we are paid as a mileage allce (26p?).
I found this link; http://www.hmrc.gov.uk/forms/p87.pdf
I doubt that the duty mileage I have done this year would warrant the effort involved, plus it would involve extracting information from JPA which in itself is daunting.
I thought I'd flag it up anyway just so we can play the bureaucrats at their own game and generate some more paper - has anyone sucessfully done this and is it worth the effort?
Any other little tax beauties out there that we should know about?
Regards FOK
I found this link; http://www.hmrc.gov.uk/forms/p87.pdf
I doubt that the duty mileage I have done this year would warrant the effort involved, plus it would involve extracting information from JPA which in itself is daunting.
I thought I'd flag it up anyway just so we can play the bureaucrats at their own game and generate some more paper - has anyone sucessfully done this and is it worth the effort?
Any other little tax beauties out there that we should know about?
Regards FOK
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Done it before, when i was regularly using my wheels for company trips. Its worth it as it is money that claims rates don't pay out, if the claims rates were equal to the allowance for all govwernment staff this scheme would not be needed.
Can't claim the difference for sport trips either.
Now use MT or don't go ...
Can't claim the difference for sport trips either.
Now use MT or don't go ...
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FO Kite
It is a very simple process, especially if you are filing online. You need the records of the mileage and the rate per mile you were paid. The difference from 40p, times the number of miles travelled equals the excess mlieage allowance. All you need then put on the online form is that total amount. Then keep the records; you will need them if your return is chosen for an audit.
It is really no effort at all and well worth doing. It is your money after all, why lose it?
Regards
Ginseng
It is really no effort at all and well worth doing. It is your money after all, why lose it?
Regards
Ginseng
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Why do you have a tax return? Are you ploughing through HMRC websites for the wrong reason?
Self assesment shouldn't really affect duty mileage rates particularly as PAYE, of which I presume you are. Unless you have a limited company aside to service in the mil.
I may be wrong, unless you are claiming tax back for unnecassarily taxed allowances, then the only way is to get a good accountant and ask them to determine your correct expenses vs allowances iaw IR policy .
TW
Self assesment shouldn't really affect duty mileage rates particularly as PAYE, of which I presume you are. Unless you have a limited company aside to service in the mil.
I may be wrong, unless you are claiming tax back for unnecassarily taxed allowances, then the only way is to get a good accountant and ask them to determine your correct expenses vs allowances iaw IR policy .
TW
Do it less now that I don't use my car so much for work stuff but last year it reclaimed me £30 - and that's just for a trip to London and back. Depends whether you want to fill in a tax return - more and more, those with no more than their single income and tax paid at source are being told not to bother with tax returns.
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Talk Wrench & Background Noise
That's exactly why you should make the effort and insist on filing a return. The tax man won't return to you what is rightfully yours unless you force him to acknowledge your claim. It is less work for him if he persuades you that you don't need to file, but you may be the one who loses out. It is your right to insist on filing a return.
Regards
Ginseng
Regards
Ginseng
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Talk Wrench, sorry but in the case outlined it is in your interests to generate the tax claim even it it is not called for.
Now if you do one public transport rate journey of 100 miles then you will get £26. At standard rate you would have got £40. Now as a basic rate tax payer you can claim the tax relief on £16 - at 22% that is a whole £3.52 of tax refund.
OTOH if that was 1000 miles it would be £35.52 and if you were a higher rate tax payer it would be at 40% and thus worth £64. Now you are looking at something possibly worth claiming.
Better, the tax relief relates to the milage you actually covered on business and not what handbrake house paid you. Say the HBH journey was 100 miles but the route you took was 110 then you claim 100x14p + 10x40p. The difference might occur because of a roadworks detour you chose to use or a bypass that HBH disallows etc. Provided you retain the route info should the Customs and Excise do an audit you will be OK.
When you do your resettlement training the mileage claims can be substantial.
Another tip is claiming for uniforms. True officers get a £361.80 deduction from pay to cover the cost of maintenance and replacement this only covers replacement etc or working dress. The relief, at 22%, over 5 years, would enable you to replace all your working kit. It does NOT cover the cost of No 1s, No 5s, SD Hats etc. Keep the receipts and claim as these arise. If the gent seeking a G&H No 5 pays out £1000 then he could get between £220 and £400 relief. This does not apply for your first issue of course as that is 'free'.
Now if you do one public transport rate journey of 100 miles then you will get £26. At standard rate you would have got £40. Now as a basic rate tax payer you can claim the tax relief on £16 - at 22% that is a whole £3.52 of tax refund.
OTOH if that was 1000 miles it would be £35.52 and if you were a higher rate tax payer it would be at 40% and thus worth £64. Now you are looking at something possibly worth claiming.
Better, the tax relief relates to the milage you actually covered on business and not what handbrake house paid you. Say the HBH journey was 100 miles but the route you took was 110 then you claim 100x14p + 10x40p. The difference might occur because of a roadworks detour you chose to use or a bypass that HBH disallows etc. Provided you retain the route info should the Customs and Excise do an audit you will be OK.
When you do your resettlement training the mileage claims can be substantial.
Another tip is claiming for uniforms. True officers get a £361.80 deduction from pay to cover the cost of maintenance and replacement this only covers replacement etc or working dress. The relief, at 22%, over 5 years, would enable you to replace all your working kit. It does NOT cover the cost of No 1s, No 5s, SD Hats etc. Keep the receipts and claim as these arise. If the gent seeking a G&H No 5 pays out £1000 then he could get between £220 and £400 relief. This does not apply for your first issue of course as that is 'free'.
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TW, I have a tax return because I have money invested in an account that attracts CITR (Community Investment Tax Relief): In addition to the interest that the account generates it attracts 5% relief which generates, for me, £500 p.a. which has to be actively claimed back via a tax return.
Glad to see other interest generated, in my experience ways of claiming monies due are not widely publicised, nor easy to understand.
FOK
Glad to see other interest generated, in my experience ways of claiming monies due are not widely publicised, nor easy to understand.
FOK
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You will also have a tax return if you own your own business like lots of serving peolpe do. I run my own business and my tax return is dead easy....I get a man to do it. (and then claim his fees back)
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Pontius N
~A cunning plan, however if the first issue is 'free' surely subsequent No 5s/No1s are replacements.
Another tip is claiming for uniforms. True officers get a £361.80 deduction from pay to cover the cost of maintenance and replacement this only covers replacement etc or working dress. The relief, at 22%, over 5 years, would enable you to replace all your working kit. It does NOT cover the cost of No 1s, No 5s, SD Hats etc. Keep the receipts and claim as these arise. If the gent seeking a G&H No 5 pays out £1000 then he could get between £220 and £400 relief. This does not apply for your first issue of course as that is 'free'.
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You also need to fill in a tax return if you are a higher rate tax payer and make Additional Voluntary Contributions to a pension fund. When I used to make those payments, 22% would automatically be added into the fund but I had to claim 18% back from the tax office.
For example, if I paid in £1000 over a tax year, my pension fund would be credited with £1220 - but I'd also get a cheque back from the tax man for £180.
Getting back to the original point - it says a lot for the military mileage allowance that it falls so short of what the treasury considers to be a reasonable rate of 40p a mile! But then again, what do civil servants pay themselves for mileage?
For example, if I paid in £1000 over a tax year, my pension fund would be credited with £1220 - but I'd also get a cheque back from the tax man for £180.
Getting back to the original point - it says a lot for the military mileage allowance that it falls so short of what the treasury considers to be a reasonable rate of 40p a mile! But then again, what do civil servants pay themselves for mileage?
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Autorev,
That is the point. The tax relief is due on clothing that you necssarily purchase and maintain to do your job. The money deducted at source is sufficient only to replace all your socks, shoes, shirts, trousers, woolly pulley, over a 5 year life. Some items will need replacing twice in that time.
That relief does not even allow for laaundry and dry cleaning bills.
Obviously, if you are aircrew your kit will last indefinitely, or until you grow out of it.
At £400-500 a pop for a new number 1 it is a no-brainer that your £361.80 relief only gives you £75 or so. So claim the £400 in your tax form and get another £88. My wife was a nurse. She had a standard £10 per year. This was then jumped to £18. I claimed an additional of about £6 per week laundry, for a replacement (not new you notice) fob watch, replacement white shoes etc. No quibbles, relief in full.
That is the point. The tax relief is due on clothing that you necssarily purchase and maintain to do your job. The money deducted at source is sufficient only to replace all your socks, shoes, shirts, trousers, woolly pulley, over a 5 year life. Some items will need replacing twice in that time.
That relief does not even allow for laaundry and dry cleaning bills.
Obviously, if you are aircrew your kit will last indefinitely, or until you grow out of it.
At £400-500 a pop for a new number 1 it is a no-brainer that your £361.80 relief only gives you £75 or so. So claim the £400 in your tax form and get another £88. My wife was a nurse. She had a standard £10 per year. This was then jumped to £18. I claimed an additional of about £6 per week laundry, for a replacement (not new you notice) fob watch, replacement white shoes etc. No quibbles, relief in full.
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People need to be careful when claiming for fuel allowances; unless you have made a journey where MMA is paid then you can not claim the journey at the 40p rate. RESPOD mileage is not a business journey, it is classed as normal travel to work which everyone is expected to pay. How do I know, I have just had to pay back £1494.23 which I claimed against RESPOD mileage during 2003-2004; yes the tax man is now wise to this and you will get caught. I unfortunately learned the hard way.
Oh well.
PP
Oh well.
PP
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peoplespoet
True, but it should have been obvious that RESPOD did not qualify for a claim. Normal commuting to work costs do not count as business mileage, and never have done.
Regards
Ginseng
Regards
Ginseng
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Thanks for the reminder. My P87 for the last FY is now winging its way to Cardiff.
Does anyone else think that this whole process is a massive dung heap of beurocracy? If the recognised government allowance for a business mile is 40p, why the heck do we have to clam 26.4 pence of it from the MOD and the remaining 13.6p of it from the IR. These are both government departments!! Why can't the MOD pay 40p per mile and take an appropriate budget transfer from the IR?
Incidently, you DO NOT have to fill in a tax return to claim this allowance. You can send a P87 in isolation (or even just write a letter to the Tax Office in Cardiff).
And a personal plea to all you officers and SNCOs out there.... How many of your lads and lasses are even aware that this allowance exists? If you claim it yourself, please take the time to explain how it works to the troops, as Handbrake House policy on this one is that "Tax is a private matter".
Does anyone else think that this whole process is a massive dung heap of beurocracy? If the recognised government allowance for a business mile is 40p, why the heck do we have to clam 26.4 pence of it from the MOD and the remaining 13.6p of it from the IR. These are both government departments!! Why can't the MOD pay 40p per mile and take an appropriate budget transfer from the IR?
Incidently, you DO NOT have to fill in a tax return to claim this allowance. You can send a P87 in isolation (or even just write a letter to the Tax Office in Cardiff).
And a personal plea to all you officers and SNCOs out there.... How many of your lads and lasses are even aware that this allowance exists? If you claim it yourself, please take the time to explain how it works to the troops, as Handbrake House policy on this one is that "Tax is a private matter".
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Kite,
It is definately worth it if you claim a lot of MMA.In the last 6 years I have claimed back over £1000.It is very simple and can be claimed even if you do not submit a tax return.PSF provided me with a printout of all my relevant F1771's and it was then easy to determine mileage.As mentioned it does not apply to RPOD or RILOR.Just recently sent off my claim for 2000-2004 and I'm entitled to about £450,I do do a lot of mileage though.
It is definately worth it if you claim a lot of MMA.In the last 6 years I have claimed back over £1000.It is very simple and can be claimed even if you do not submit a tax return.PSF provided me with a printout of all my relevant F1771's and it was then easy to determine mileage.As mentioned it does not apply to RPOD or RILOR.Just recently sent off my claim for 2000-2004 and I'm entitled to about £450,I do do a lot of mileage though.
Hovering AND talking
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Your local friendly Chartered Accountant is just chipping in here (not my normal forum!!).
Ginseng and Pontius Navigator have it pretty much right! And you don't need an accountant to work it our for you - the help online and through the telephone helpline is good; the Revenue will help where they can.
Max Contingency - the tax rules of 40 pence (for the first 10,000 business miles) per mile is valid for everyone, whether you work for a Government organisation or not. HMR&C would be hard pressed to do it automatically for different government employees and "manually" for others.
BTW I am also a government employee and I get 40p per mile so it varies.
Cheers
Whirls
Ginseng and Pontius Navigator have it pretty much right! And you don't need an accountant to work it our for you - the help online and through the telephone helpline is good; the Revenue will help where they can.
Max Contingency - the tax rules of 40 pence (for the first 10,000 business miles) per mile is valid for everyone, whether you work for a Government organisation or not. HMR&C would be hard pressed to do it automatically for different government employees and "manually" for others.
BTW I am also a government employee and I get 40p per mile so it varies.
Cheers
Whirls
I don't own this space under my name. I should have leased it while I still could
TY Whirlygig.
Just want to correct a slighly misleading point about the 13.6p/m.
This is the difference between what the treasury allows as the top mileage claim and the money paid by handbrake house. It is NOT a payment of 13.6p.
It is tax relief on 13.6p. At 22% that is only 2.99p and at 40% it is 5.44p.
In otherwords what you actually get for your mileage is 26.4+2.99 or 26.4+5.44.
If you get the top wack you get 40p. If your company pays you 50p then you have to pay tax at the appropriate rate on the extra 10p.
If you company only pays you 10p/m then you claim the tax relief on the 30p so a lower rate payer ends up with only 16.6p.
As for briefing the troops, you can lead a horse to water . . . I tried.
The ones who should do this are the Resttlement advisors as you can clock up some mileage attending briefings, training sessions, courses, and also the travel on your resettlement training - and this is for each return journey each week or each day as this is not your normal place of work and therefore not commuting.
Final point, you do not need a previously authorised 1771 to justify tax relief although it can help. Provided you can prove you made the journey - detachment orders etc - you can claim.
Just want to correct a slighly misleading point about the 13.6p/m.
This is the difference between what the treasury allows as the top mileage claim and the money paid by handbrake house. It is NOT a payment of 13.6p.
It is tax relief on 13.6p. At 22% that is only 2.99p and at 40% it is 5.44p.
In otherwords what you actually get for your mileage is 26.4+2.99 or 26.4+5.44.
If you get the top wack you get 40p. If your company pays you 50p then you have to pay tax at the appropriate rate on the extra 10p.
If you company only pays you 10p/m then you claim the tax relief on the 30p so a lower rate payer ends up with only 16.6p.
As for briefing the troops, you can lead a horse to water . . . I tried.
The ones who should do this are the Resttlement advisors as you can clock up some mileage attending briefings, training sessions, courses, and also the travel on your resettlement training - and this is for each return journey each week or each day as this is not your normal place of work and therefore not commuting.
Final point, you do not need a previously authorised 1771 to justify tax relief although it can help. Provided you can prove you made the journey - detachment orders etc - you can claim.
