a tax question

[RacingSnake]

I have just had a sudden thought. I am a teacher and at times am sent on courses or errands for my school. I claim petrol money for doing this, but on my tax return this is deducted from my tax allowance. Since I have had to spend this money for work and am only being reimbursed, why should I pay tax on the money? That means, for example, I spend £10 on petrol, the school gives me £10 and I have to pay £2.50 of that in tax, so being £2.50 out of pocket for using my car for work. (I am obviously not objecting to paying myself for driving to and from work, which everyone does)

I've been thinking about this now that I have to travel for work a bit. It doesn't seem fair does it?

It's probably to stop employers/employees putting through loads of stuff through as expenses and avoiding tax.

No idea on the tax question (but will be interested to know as DP will be doing this soon)

All I was going to say was make sure your car insurance covers you for trips for work

I guess if you travelled regularly your employer would give you a company credit card to avoid it? (hell would freeze over in my organisation)

Maybe it's the sort of thing you'd claim for on a tax return as well. I'm straight PAYE and don't travel enough for it to be worth filling in a tax return for if this was the case.

how much petrol money do you claim?

you can claim 40p a mile (up to 10,000 miles a year)

you need to claim it in a way that HMRC allows it

but your office should be telling you this

you are allowed to claim travelling expenses (for work purposes, as long as it is not home to work or vice versa) but you can only claim within certain HMRC rules and tbh, for travel, I think they are quite fair

You would normal claim on a mileage basis - which is usually 40p per mile. If you put £10 in you wouldn't only use that £10 on work related travel. You would also be using part of that for private mileage. Hence claiming business use per mile is fairer. You need to discuss this with your employer

mileage expenses

this is for employers but you can see the rules here

as long as they only pay you 40p a mile, it isn't reported and should not affect your tax. It's only if you are paid more than this.

Keep a log of the miles of your journey. Write down your odometer reading at the start and then at the end and write it down on your expense claim (and keep a copy).

hope that helps

Some conflicting information here, and some that doesn't apply to you so...

You need to claim the mileage you do as an expense relating to your employment on your tax return. You can calculate this at the rate of 40p per mile for the first 10,000 business miles in a tax year - it doesn't matter if they have paid you a different rate.

Now on your tax return, the amount they have paid you for expenses goes on the Employment page in Box 16 'Expenses payments received and balancing charges' (2008-9 return). If you haven't filled in a tax return before, HMRC are getting this figure from a form P11D that your employer sent them (and a copy to you) last spring.

Now you put the amount you have calculated for mileage in Box 17 'Business travel and subsistence expenses'. Include any other expenses that are shown on your P11D and are allowable for tax (but not any benefits that are shown there).

The reason some people have said other things here is that many employers have a 'dispensation' so that they don't report expenses payments to the tax man, and you don't therefore have to claim them against tax - much simpler all round. But if you are saying that these payments are appearing in your tax computation then they must have been reported to HMRC and so your employer must not have a dispensation.

One final thing - you say that 'on my tax return this is deducted from my tax allowance'. Does it say 'PAYE Coding Notice' on it? If it does, it is not a tax return. Did you complete a tax return for last year?

Ok, so my expenses just get paid to me through my normal payroll. To get the tax back I'd have to complete a tax return?

As it's probably no more than a couple of hundred pounds a year (the expenses, not the additional tax paid) it's not really worth it is it?

Ah for the days we could just take it out of petty cash. Damn you, boss who now does things by the book

no, you don't have to have a dispensation for mileage - they are specifically excluded

her employers are putting it on her P11D as they haven't bothered to work out the mileage thing and I imagine she hasn't written down the mileage for this year so the entire amount is being classed as a private payment (for want of a better word)

the fact that they have put it on the P11D means the entire amount will be regarded as taxable which is actually your employer's fault

you need to speak to them and explain you can claim 40p a mile. It is an allowed expense that does not have to be taxed in your hands.

They aren't doing it by the book, they are probably doing it by the easiest means for them which means shoving everything on your P11D which actually isn't entirely correct. You need to speak to them.

Unless these trips aren't genuine business epxenses in which case they are right to do what they are doing!

(as long as the mileage does not exceed the amount of the authorised allowable amount (currently 40p) for the specified given business miles, no dispensation is necessary)

and MrA, please say hi to your wife for me and tell her I miss her!

My apologies foxi, you are absolutely right - it is a while since I pulled out booklet 480 . Do I know you by another name?

shona, I assume your school uses the local authority payroll service? Perhaps there is a different form for you to claim mileage so that it doesn't get declared for tax?

You would have to contact your tax office to get the tax back for payments already made. They may ask you to fill in tax returns, but they may just accept a letter from you stating the amounts you have not claimed for each year. If this is say £200 a year for 3 years, that could be £120 in tax or more - you can go back as far as April 2004.

Write to your tax office with all the details and summarise the amounts like this:

Business travel expenses not previously claimed:
2004/5 432 business miles @ 40p = £173
2005/6 ...

It would be useful to get a list of the journeys you are claiming for (date, destination, miles).

Thanks, I'll look into it. I'm NHS. Our payroll do occasionally make mistakes frequently bugger things up so it wouldn't surprise me.

Yes, thank you. You are right, it is not a tax return, it is one of them things you mentioned. Sadly, I have not kept records of all the mileage for this tax year, so there is nothing I can do - I sort of thought payroll at the LEA would know what they are doing and would therefore get everything right.

Oh, didn't realise there were 2 of you!

Anyway RacingSnake, beacuse this is is on your coding notice it means that HMRC are assuming that you will be paid this amount again this year, and you are paying tax on it each month. Make sure you fill in a tax return for this year after you receive your P11D, making sure you claim everything you can and then everything should be sorted.

Thank you!