Calculating My Fuel Tax Relief

Discussion in 'Motoring' started by Sabre, Aug 21, 2013.

  1. Sabre

    Sabre
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    Hi

    Hope you can help me.

    I'm trying to work out what amount of money I will have available to me every month should I buy my own car whilst retaining the fuel card my company give me for personal and business miles.

    I am a higher rate tax payer.

    I get an allowance pre-tax of £375 = £225 after tax per month
    My current Passat (company car) costs me £130 in tax per month

    I think I will do 25000 miles in total per annum, 3000 of which will be personal

    My thinking was that I get 45p for the first 10k miles = £4500
    Then I get 25p thereafter for the remaining 15k miles = £3750
    Total = £8250

    My estimate is that I will spend £3000 per annum on the fuel card.

    Do I deduct this from the £8250 then retain 60% to get my annual "rebate"?

    i.e. £8250 - £3000 = £5250

    £5250 * 60% = £3151 per annum or £263 per month?

    This means I'll have £225 + £130 + £263 = £618 per month for my own vehicle?

    Cheers all. Sorry, I've been searching for ages to find a simple formula online but failed.
     
  2. thedude

    thedude
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    Hi fella. As this is my field.
    Need to ask you a couple of questions.
    Do you work for a big company???
    Is the card in your name or theirs??
     
  3. Sabre

    Sabre
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    Hi thedude,

    It is a big company I suppose. The card is in their name.
     
  4. thedude

    thedude
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  5. rousetafarian

    rousetafarian
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    Ok, first question does your company pay for both personal and business miles? Secondly what is your company allowance per mile (usually £0.xx pence/mile)

    In my case I did around 22,000 miles as a higher band tax payer and my company paid £0.18p per mile for business miles and private miles were deducted from my monthly salary. The tax rebate was as follows

    45p - 18p = 27p x 10000 miles = £2700.00
    25p - 18p= 7p x 12000 miles = £840.00

    Total = £3540.00/100 *40% = £1416.00 back in your wage

    Forget the tax relief for now as you will need to claim this back at the beginning of the next tax year.

    If you want to work it into your future payments it equates to £118.00/month from above + £225 net from the company scheme + £130.00 you 'gain' by not having to pay BIK on the company car = £473.00/month to buy, insure, tax, maintain and keep your car.

    This may be wrong and if so, I'd speak to HMRC (or thedude above)
     
    Last edited: Aug 21, 2013
  6. Sabre

    Sabre
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    Rousetafarian,

    My company pays for both personal and business miles via the fuel card

    They pay 18p a mile

    thedude,

    That page makes no sense to me...I saw it earlier and my brain exploded.
     
  7. Sabre

    Sabre
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    Rousetafarian, I don't see why you're deducting 18p a mile from the 45p/25p?

    I know the tax relief can only be claimed back at the beginning of the next tax year but I still want to factor it in as it is essentially a benefit to me towards the cost of running the car
     
  8. rousetafarian

    rousetafarian
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    Because legislation states you can only claim the difference back between the company rate and HMRC rate not the full amount.

    The company could pay a penny a mile or 44p/mile.....it's their call.
     
  9. Sabre

    Sabre
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    thedude,

    Figured out the page you posted. The car I want is 19% and it says that if I only do 3000 personal miles then it isn't worth me having the fuel card. However, I'm still utterly confused.
     
  10. rousetafarian

    rousetafarian
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    Tax relief for business mileage in your own vehicle
    You may be able to get tax relief for business mileage if you use your own vehicle for work. It can be a car, van, motorcycle or cycle.

    You can work out the amount of tax relief – called ‘Mileage Allowance Relief' - to which you are entitled like this:
    1. add up your business miles travelled in the tax year
    2. multiply your business miles by the approved mileage rate to work out the approved amount – follow the link below for the latest approved mileage rates

    3. add up any mileage allowance payments received from your employer

    4. compare any mileage allowance payments received with the approved amount
    If the approved amount's more, you're entitled to Mileage Allowance Relief on the difference.
    For example, you use your own car for 900 business miles and your employer pays you 30p per mile. The approved amount is £405 (900 times 45p). The allowance you get from your employer is £270 (900 times 30p). Your Mileage Allowance Relief is £135 (£405 less £270). The Mileage Allowance Relief will reduce the amount of income you pay tax on, so your tax bill will reduce by £135 at 20% (if you're a basic rate taxpayer) or at 40% (if you're a higher rate taxpayer) and at 50% (if you're an additional rate taxpayer)

    You are only entitled to Mileage Allowance Relief if your employer pays you:
    no mileage allowance
    less than the approved amount
    If your employer pays you more than the approved amount, you'll have to pay tax on the extra.
     
  11. thedude

    thedude
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    Try these guys, i dont work for them before you ask. I run my own. just so you know im not plugging

    Ogilvie | Fuel benefit check

    basically if you pay your work back for private mileage you dont get taxed. If you dont you do. This tells you if you are better off paying the company back or getting "free" fuel.
     
  12. Sabre

    Sabre
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    I see where you're coming from. A colleague said that the amount spent on my fuel card gets deducted from the pence per mile calculation. Is he talking rubbish?
     
  13. Sabre

    Sabre
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    I appreciate the help but please can you tell me how to work out my situation? This is what I've been doing for the last two hours and none of it answers my question in a simple, straightforward way.... :(
     
  14. thedude

    thedude
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    Sabre,
    What are your choices?
    Do you have choices or you just trying to see what to pay. You are PAYE your company will work this out for you.
     
  15. rousetafarian

    rousetafarian
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    I'll repeat in my case I did around 22,000 miles as a higher band tax payer and my company paid £0.18p per mile for business miles and private miles were deducted from my monthly salary. The tax rebate was as follows

    45p - 18p = 27p x 10000 miles = £2700.00
    25p - 18p= 7p x 12000 miles = £840.00

    Total = £3540.00/100 *40% = £1416.00 back in your wage

    You will pay a small amount more in tax as you get your personal miles paid for, hence it's a benefit......this is pretty close to your situation I would guess
     
  16. Sabre

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    I can opt out of the fuel card but I like the fuel card as it means I don't have to pay for any fuel out of my own bank account. I do a lot of business miles, hence my reasoning behind that. I would end up with a huge deficit every month by not using the fuel card and I'd be playing catch up with expenses to try and cover my fuel outgoings.

    I just want to figure out that if I do 22000 business miles and 3000 personal miles, all paid for by the company fuel card, what will I get back from the tax man at the end of the year in mileage allowance relief?
     
  17. Sabre

    Sabre
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    Rousetafarian, in your case do you use a company fuel card? Also, what happens if I don't want to pay my company for personal miles every month out of my salary? Is this even an option?
     
  18. rousetafarian

    rousetafarian
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    See post 15 (goodnight)
     
  19. rousetafarian

    rousetafarian
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    I pay for all of my fuel using a fuel card and then get my personal mileage deducted from my wage each month.....roughly £20.00/£30.00
     
  20. thedude

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    Most people pay their personal mileage each month out of their salary. This is something you should take up with your company.
     
  21. Sabre

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    I do this at the moment to the tune of around £120. I got a rebate recently after submitting my personal and business mileage every month for a year. If I continue doing this, how does this affect my fuel tax relief?
     
  22. FZR400RRSP

    FZR400RRSP
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    Fuel benefit for 2013/2014 is £21100
    Multiply that by your car's co2 tax bracket of 19% and that gives you a BIK figure of £4009.00
    Multiply that by your tax figure of (presumably) 40% and you will be paying £1604.00 per year (£133.63 per month) for the pleasure of 'free' fuel for personal use.
     

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