Using own car for work..... tax form

[Justwingingit2005]

My husband uses his car for work.
His total expenses are around 7k.
Work have paid 2.5k.
Hes submitted a self assessment for 4.5k and tax office is saying he is only due £200 tax relief. He is a 20% tax payer.
Does anyone know how this stuff is worked out as it's frying my brain cells.

You can only claim a deduction against income of the official HMRC mileage rates which are 45p per mile up to 10,000 miles and 25p per mile thereafter.

If work have paid him a smaller "per mile" rate, then he can only claim a deduction against income for the difference between that and the 45/25p rate.

Then he gets basic rate tax relief on that difference, at 20% basic rate.

What mileage rate have his work paid him and what mileage is he claiming for?

The only expense he can claim is the fuel.....is he including wear and tear, tax and MOT within the £7k because unless he is self employed you can't claim anything back like that. You can only claim the mileage element

Hes done roughly 20k miles for work.
His work have paid roughly 2.5k of the 7k he should be due on the 45p 25p amount.
This is just for fuel.
So we assumed he would get 20% of the 4.5k to roughly 1k tax allowance but the online submission is saying £196.

He wouldn't get the tax on the difference of 20,000 miles just the 10,000

So how much is he paid per mile from his work?
Because 20,000 miles isn't £7k
Take diesel at 180.88 pence per litre
And say his car does 35 miles per gallon (which is on the low side)
Then 20,000 miles is going to cost about £4,500

You can't claim fuel costs, you have to claim the HMRC official mileage rate of 45/25p per mile. Your "actual" fuel cost is irrelevant.

Hes done roughly 20k miles for work.

We understand that gov pay 45p per mile for 10k miles then 25p per mile after that.
His company paid 13p per mile flat rate.

So we assumed 20k miles x 13p. The total is minused from the gov charge then the tax is refunded to you. Have we misunderstood. His HR dept can't advise.

Assuming it's his own car not a company car?

It's hard to say without the calculation if there is an error.

I think
1- he has over estimated his costs. As per my previous post driving his car 20,000 miles can't have cost £7k
2 - you get tax relief on the 45p/25p that's it - you don't get paid the actual cost of fuel
With the current cost of fuel then 13p does mean he's out of pocket unfortunately and he should speak to his HR about reviewing fuel costs

Does he get a car allowance?

He needs to take it up with work, this is a pay package situation nothing to do with tax. 45p is the max and most companies pay it unless he's getting a car allowance or has a company car in which case it's usually lower

Agree with @motogirl

At my company it was 12p per mile for unleaded cars if you got a car allowance or 45p if you didn't
They have recently increased it to 25p per mile for those with a car allowance to reflect the increase in fuel costs

This is what I would have thought too

Have hmrc provided their calculations?

Based on 20,000 miles it looks like the relief would be £980

£196 is 20% of this

He needs to take it up with his company. Ask them to check / ask why "13p per mile flat rate."

Break down the £7k? How are you getting to this figure? That doesn't seem right.

Based on 20k miles -

Approved mileage rates:
45p x 10,000 = £4,500
25p x 10,000 = £2,500
= £7,000

Minus the amount his employer paid:
(13p x 20,000 = £2,600)
£7,000 - £2,600 = £4,400

20% tax back on £4,400 = £880

So, he should get £880 back. Unless...

Was his tax code changed in a previous year? (I think it's currently 1257L). I used to work in the community. After my first tax relief claim, they put my tax code up so I paid less tax over the year to take these extra expenses into account.

OP's calculations;

20000 miles;
10k @ 45p = 4500
10k @ 25p = 2500

Total 🟰 7000

Work have paid 13p

20k x 13p = 2600

Difference in amount paid and claimable amount is £4400.

Is it his own car or the company's?

It looks like they've paid him the fuel only rate:

www.gov.uk/guidance/advisory-fuel-rates

13 ppm is the rate for a small petrol car.

If your DH bought the car with his own money, he should get 45/25 ppm and pay all his expenses himself. If they don't pay that, he needs to not use his own car for work and they need to provide him with a car. It's not worth doing it for the fuel and the tax top up, however much it is.

If the cost of the car (buy/lease and tax, insurance etc) is met by his employer then he only needs reimbursing for his business fuel.

If he gets a car allowance it should say in the policy and depends on a few things, but it could be fuel only if the car allowance is supposed to be enough to buy a suitable car and keep it running (repairs, insurance, servicing etc).

Is he the only driver in the company or are there others too? What are they getting?

What was his PAYE tax code? It is possible that if he claimed tax relief for mileage in previous year(s), his PAYE code already included an estimate for his mileage allowance claim, so the unexpected small refund may be just for the difference between what was estimated and his actual, higher, business mileage.

The advisory fuel rate is the rate an employee is meant to pay back to the employer if they have a company car to avoid paying tax on private mileage.

that is a ridiculously low mileage rate for using your own car. I’d be refusing personally.

but the calculation pp posted is correct.

You need the full computation OP.
A number of posters have detailed the calculations covering your figures, but there may be other things in his overall tax position which are contributing.

The advisory fuel rate is the rate an employee is meant to pay back to the employer if they have a company car to avoid paying tax on private mileage

It also works how I said. When I had a company car I bought all my own fuel and put a claim in for my work miles at the advisory fuel rate.

The fact that the OPs DH is being paid for fuel only suggests that either he has a company car, a car allowance that is supposed to cover everything except fuel or his employer is ignorant about how business travel is supposed to work. But unless the OP clarifies her DHs actual arrangements and tax position no-one can help her.

Sorry to butt in but.. I work in the community for NHS and get paid per mile - 56p. Do I need to do anythng with my tax? Thanks

It depends if it’s payrolled or not.

if your mileage is payrolled then you will be taxed via your payslip on the extra 11p per mile you are getting.

or if not you should get a P11D each year and your personal allowance will be adjusted by HMRC.