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They have told all of the staff that they must claim back 4-p per mile (petrol) from the tax man!
Im just wondering if they are legal in what they are saying/doing
whats the best way for her to claim back any money?
Basic rate taxpayers should get an allowance of up to 40p per mile paid by the employer in some shape or form. Above that and she has to pay tax.
Of course, it depends on her contract of employment as to how she is paid for using her own vehicle. Either way, she should always, without fail, keep a record of company milage.
You're entitled to a tax free allowance of 40p for the first 10,000, then 25p per mile after that amount. That's she could be entitled to claim from her employer.
She could claim more if it was available but she'd have to pay tax on the rest as income.
Now, where there is a defecit, which there is in this case, she's entitled to claim the tax back on this amount.
So, say she did exactly 10,000 miles and her employer paid her nothing, the defecit would be £4,000. Now, I'm not sure exactly what the percentage is as I've never had to claim extra, but as it's related to income I'd assume 20ish % the same as her PAYE will be. So in that case she would be able to claim back around £800, a nice sum expecially if she does do a lot of miles.
So yes it is legal in what they're saying, but how to do it I don't know, that's for my accountant to sort out! It's probably on her SA somewhere.
But I would say that if she's driving around all day and not getting paid mileage, she should stick her job and go and work somewhere that'll give her a company car or pay her mileage!
exactly what shes going to do :)
Thanks
