Dull question from permieland about getting less than 45p a mile....

[Craig@Clarity]

Current client pays the permies 20p a mile. And has been telling them no worries you can get the additional 25p a mile from HMRC who will make it up to the recommended figure....

Eh? Thats a complete load of tosh isn't it? Yes you can claim back the difference between 45p and whatever you get as an ALLOWANCE against tax. i.e. Basically, thats 25p per mile that you do that you now dont pay tax on - if you're a basic rate taxpayer thats 5p per mile on tax saved.


Deffo not 25p they give back to you. The permies don't believe me. Tell me I'm not going mad and I'm right? And a link?

You're right and not going mad. It's an allowance, so they get tax relief on the difference that their stingy employer won't dish out. Tell them to call HMRC and they should be able to adjust their tax code to include the expense deficit to uplift their personal allowance.

[psychocandy]

You're right and not going mad. It's an allowance, so they get tax relief on the difference that their stingy employer won't dish out. Tell them to call HMRC and they should be able to adjust their tax code to include the expense deficit to uplift their personal allowance.

Thanks Craig. Client is STILL saying HMRC pay you 25pm a mile back in tax....Completely nuts that there is no-one in a big company that understands this......

Although I get the impression that its suits them for the employees to believe they're not missing out on 45p at all. Accidentally on purpose.....

[psychocandy]

You're right and not going mad. It's an allowance, so they get tax relief on the difference that their stingy employer won't dish out. Tell them to call HMRC and they should be able to adjust their tax code to include the expense deficit to uplift their personal allowance.

So effective rate is 20pm from employer and then 5pm saved in tax for a total of 25p?

Bit of a difference to 45p

[Craig@Clarity]

So effective rate is 20pm from employer and then 5pm saved in tax for a total of 25p?

Bit of a difference to 45p

20% of 25p if they're a BR tax payer and 40% if they're a HR taxpayer (but you know this).

They can get it adjusted on their tax code or as a lump sum repayment depending on timescales and period of claim.

[psychocandy]

20% of 25p if they're a BR tax payer and 40% if they're a HR taxpayer (but you know this).

They can get it adjusted on their tax code or as a lump sum repayment depending on timescales and period of claim.

Yep. Exactly as I thought..... Thanks for confirming........