03-05-2015, 07:00 AM | #1 |
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OT: First Time PCP leasers....P87 forms
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
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03-05-2015, 08:35 AM | #2 |
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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.
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03-05-2015, 09:44 AM | #4 |
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Yes indeed, just took it fro my perspective. Get back what you can
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03-05-2015, 10:56 AM | #5 |
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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. |
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03-05-2015, 11:23 AM | #6 |
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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.
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03-05-2015, 12:22 PM | #7 | |
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03-05-2015, 12:30 PM | #8 | |
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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. |
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03-05-2015, 12:32 PM | #9 |
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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).
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03-05-2015, 12:59 PM | #11 | |
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I was hoping you'd save me millions!
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03-05-2015, 01:32 PM | #12 | |
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03-05-2015, 01:38 PM | #13 |
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check this out and will give you some idea re savings/cost
http://www.mysaleshelp.com/index.php/car-calculator |
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03-05-2015, 02:02 PM | #14 |
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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. |
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03-05-2015, 02:05 PM | #15 | |
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03-05-2015, 03:16 PM | #16 | |
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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.
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03-05-2015, 03:44 PM | #17 |
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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.
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03-05-2015, 04:50 PM | #18 |
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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. |
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03-05-2015, 05:26 PM | #19 | |
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03-05-2015, 05:31 PM | #20 | |
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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 |
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03-05-2015, 05:33 PM | #21 | |
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03-05-2015, 05:37 PM | #22 | |
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It is potentially quite complex - and one tax lecturer I heard reckoned the tax tribunal had got it wrong in a recent case... |
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