[JustChris]

Just a thought trying to help out some that are asking questions about PCP for the first time. I'm certain I didn't know this till a few years down the line but if you are taking a company car cash allowance and then going the PCP route you are providing your own car for work purposes and thus allowed to claim back some tax relief. Its explained in an Inland Rev P87 form which you need to complete at the end of each tax year.

I wont attempt to explain here as others or the proper guide will do it better I'm sure but for me I get around £1200 a year back , I claim my mileage rate from employer at 25p a mile and do quite high mileage a year however.

Worth a read up if it helps your man maths cook/balance the books

Their is a downside and I found it brought the tax man requesting a self assessment form every year for a few years after. Still £1000 for a bit of admin yes please.

Anyway no hatting I know most of you will know this but some might not have.

Cheers
Chris

[JonD]

Good shout chris, for clafiycation it is not limited to people with PCP's or other forms of finance. If your are receive company car allowance then regardless of your finance arrangements then you can make the claim as per Chris's post.

[timmytwoshoes]

Thanks - very useful. I reckon this will apply to me. If I had known a few weeks ago I would have upped my spec a bit!

[JustChris]

Originally Posted by JonD

Good shout chris, for clafiycation it is not limited to people with PCP's or other forms of finance. If your are receive company car allowance then regardless of your finance arrangements then you can make the claim as per Chris's post.

Yes indeed, just took it fro my perspective. Get back what you can

[chetalien]

Its sounds good but you would be already paying tax on the money(company car allowance)- so not sure if it really works out. how much can you claim for mileage etc.
If your annual allowance is 10K( assume 40% tax+NI) means you have 5.5-6k in hand, unless you drive more than 17K you are not making much money(17000*0.25=4250).
I'm hoping its correct and somebody may come back and correct me.
Other thing if you are in lower tax bracket- you are pushing yourself into higher tax(which can potentially reduce childcare vouchers + Child benefit).
Worth speaking to your accountant before jumping into taking cash allowancee.

Obviously the positive side is the car will be yours and you have lot more choice and no restriction of models etc.

[Tengocity]

I used to do this when did loads of business miles, and was worth a good £100 in my pocket per month. However now I don't do that many so decided it wasn't worth the hassle of the self-assessment.

[JustChris]

Originally Posted by chetalien

Its sounds good but you would be already paying tax on the money(company car allowance)- so not sure if it really works out. how much can you claim for mileage etc.
If your annual allowance is 10K( assume 40% tax+NI) means you have 5.5-6k in hand, unless you drive more than 17K you are not making much money(17000*0.25=4250).
I'm hoping its correct and somebody may come back and correct me.
Other thing if you are in lower tax bracket- you are pushing yourself into higher tax(which can potentially reduce childcare vouchers + Child benefit).
Worth speaking to your accountant before jumping into taking cash allowancee.

Obviously the positive side is the car will be yours and you have lot more choice and no restriction of models etc.

Yes sure there is tax to pay on your income and car allowance, that's life I'm afraid. Just mentioning to those that might not know you claim some tax relief back which is always good.

[oop north]

Originally Posted by chetalien

Its sounds good but you would be already paying tax on the money(company car allowance)- so not sure if it really works out. how much can you claim for mileage etc.
If your annual allowance is 10K( assume 40% tax+NI) means you have 5.5-6k in hand, unless you drive more than 17K you are not making much money(17000*0.25=4250).
I'm hoping its correct and somebody may come back and correct me.
Other thing if you are in lower tax bracket- you are pushing yourself into higher tax(which can potentially reduce childcare vouchers + Child benefit).
Worth speaking to your accountant before jumping into taking cash allowancee.

Obviously the positive side is the car will be yours and you have lot more choice and no restriction of models etc.

I am slightly confused by your post - I think (but am not sure) that you are referring to what happens if you choose to use your own car and get car allowance from an employer rather than take a company car (or use a pool car for business miles) - but that isn;t quite what the OP is saying.

Essentially, if you use your own car for business miles (whether an employee or self-employed), you can claim a deduction (business expense) at 45p for the first 10k miles in a tax year and 25p thereafter - but subject to offsetting what you receive from the employer by way of mileage payments. So if the employer pays 25p per mile for all business miles then you get a deduction from income at 20p per mile (45 - 25) for the first 10k miles and nil thereafter (25 - 25). Multiply your tax rate by the deduction of 20p to find out the tax refund / allowance

If doing mileage for a charity as volunteer, then they can pay up to 45p and you pay no tax (subject to you doing no more than 10k miles a year for that and business use) but if they pay you less then you cannot get tax relief on the difference.

[MarkG_M5Comp]

I'd love this to work for me, alas I don't claim mileage as the company pays for fuel directly. Do you see a way out?

What you are essentially claiming is the mileage for company use right? I believe I'm already paid for that so couldn't reclaim.

I've had years of tax annoyance - 'he' decided I should be self assessed a couple of years ago then asked for the previous 2 years to be done retrospectively.

On the up side of self assessment, I am now in control of my own tax code rather than at the mercy of some dumb ass payroll clerk who managed to get it wrong every year (one year they told HMRC I had a car and a van, then removed both so I got 10 months refund, followed by an unpaid tax bill at y/e).

[JustChris]

Yeah sounds like a no go Mark ai think. Although I'm no expert.

[MarkG_M5Comp]

Originally Posted by M Car Chris

Yeah sounds like a no go Mark ai think. Although I'm no expert.

Well you're no help at all then... pa!

I was hoping you'd save me millions!

[TS206]

Originally Posted by MarkG335

I'd love this to work for me, alas I don't claim mileage as the company pays for fuel directly. Do you see a way out?

What you are essentially claiming is the mileage for company use right? I believe I'm already paid for that so couldn't reclaim.

I've had years of tax annoyance - 'he' decided I should be self assessed a couple of years ago then asked for the previous 2 years to be done retrospectively.

On the up side of self assessment, I am now in control of my own tax code rather than at the mercy of some dumb ass payroll clerk who managed to get it wrong every year (one year they told HMRC I had a car and a van, then removed both so I got 10 months refund, followed by an unpaid tax bill at y/e).

The tax allowance is for wear and tear etc also. So if your company pays for all of your company mileage ie with a fuel card (?) then you can still claim the tax refund but you deduct what your company has already paid for. ie 10k at 45p per mile + 10k at 25p per mile. Then take off whatever fuel your company has paid for.

[chetalien]

check this out and will give you some idea re savings/cost

http://www.mysaleshelp.com/index.php/car-calculator

[pugxs]

Thank you for this, very useful!

I have just negotiated a car allowance through work and was told by some other colleagues of the tax benefits, but not in much detail.

So upon claiming do you get a rebate cheque or does your tax code get altered for the following year, effectively drip feeding the benefit through monthly?

My concern is I have to ensure my working patterns at the alternative site does not constitute it being classed as a permanent place of work in the eyes of the HMRC. Wouldn't want to lose a sizeable benefit.

[JonD]

Originally Posted by pugxs

Thank you for this, very useful!

I have just negotiated a car allowance through work and was told by some other colleagues of the tax benefits, but not in much detail.

So upon claiming do you get a rebate cheque or does your tax code get altered for the following year, effectively drip feeding the benefit through monthly?

My concern is I have to ensure my working patterns at the alternative site does not constitute it being classed as a permanent place of work in the eyes of the HMRC. Wouldn't want to lose a sizeable benefit.

I've always had a cheque, they will the adjust your next years tax code to allow for this, I'm in a simlar situation so I always call them and tell them that i won't be incurring the same mileage. They then take it off, then the next year I just submit a claim.

[JustChris]

Originally Posted by pugxs

Thank you for this, very useful!

I have just negotiated a car allowance through work and was told by some other colleagues of the tax benefits, but not in much detail.

So upon claiming do you get a rebate cheque or does your tax code get altered for the following year, effectively drip feeding the benefit through monthly?

My concern is I have to ensure my working patterns at the alternative site does not constitute it being classed as a permanent place of work in the eyes of the HMRC. Wouldn't want to lose a sizeable benefit.

Mine was a cheque. You need to keep records of your journeys to provide as evidence with the submission.

I used Excel and a simple

Journey start
Journey end
Mileage
Rate reimbursed
Reason for trip (not really sure they need this)

Make sure none of the start or end is home, should really be your place of work I think.


Ask colleagues locally though, as I say quite a tidy bit if money for some admin and record keeping you would virtually be doing to claim your mileage expenses anyway.

[pugxs]

Thanks. We use a T&S system which records all of the details of our mileage claims and can generate an annual report if required as proof.

[chetalien]

Hopefully this tool can help us and make sure we use it appropriately. I was quite tempted initially and after using the tool realised it may not work for me. there are a lot of factors built in- i run a ltd company, so my situation is different.
dislaimer: it might suit a lot of ppl but please look into this carefully and speak to your accountant before you decide.

[oop north]

Originally Posted by TS206

The tax allowance is for wear and tear etc also. So if your company pays for all of your company mileage ie with a fuel card (?) then you can still claim the tax refund but you deduct what your company has already paid for. ie 10k at 45p per mile + 10k at 25p per mile. Then take off whatever fuel your company has paid for.

TS206 is correct - the company should provide you with evidence of what they pay for - I would expect they require you to declare private mileage so you can pay them for that? So the rest of the fuel they pay for is what you would deduct form the 45p/25p rates to get the allowance you can claim. I had a job where this happened

[oop north]

Originally Posted by pugxs

My concern is I have to ensure my working patterns at the alternative site does not constitute it being classed as a permanent place of work in the eyes of the HMRC. Wouldn't want to lose a sizeable benefit.

Not entirely sure where your concern lies - you are more likely to get investigated on this and be "done" for the alternative site as a permanent place of work via an investigation into the business, rather than a personal investigation into you after claiming the tax deduction. I do understand the benefit of "keeping your head down below the parapet" though

To know the likelihood of being found to have changed your permanent workplace you would need to check with an accountant. A proper one rather than an internet one

[oop north]

Originally Posted by chetalien

Hopefully this tool can help us and make sure we use it appropriately. I was quite tempted initially and after using the tool realised it may not work for me. there are a lot of factors built in- i run a ltd company, so my situation is different.
dislaimer: it might suit a lot of ppl but please look into this carefully and speak to your accountant before you decide.

I got slightly confused by this - the tool is designed to tell someone who already has a company car whether or not running the same car privately is better (or vice versa) - I am not quite sure what is not working for you. I agree that having your own ltd co makes more complex (VAT, income tax, corporation tax and NIC all need to be considered) but I have never got to the point of thinking it is worth sticking a car through mine

[oop north]

Originally Posted by M Car Chris

Make sure none of the start or end is home, should really be your place of work I think.

Not necessarily so - in one job I officially worked from home so every business journey started at home. That was unusual though. More recently my place of work was a local office 9 miles away, so all the travel to any location in another direction was business - and going more than 9 miles beyond the local office (so that most of the journey was not the normal to the local office journey) made the whole thing business. If 9 miles or less beyond the local office, then the distance past the local office would be the business journey

It is potentially quite complex - and one tax lecturer I heard reckoned the tax tribunal had got it wrong in a recent case...