Duty Mileage Tax Relief

Discussion in 'Army Pay, Claims & JPA' started by the_matelot, Feb 3, 2009.

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  1. Admin Wallahs,

    Am I right in thinking (and after a confusing phonecall to HMRC) that as the mob only pays around 26p per mile that we're entitled to claim the tax difference (be it the lower or higher rate) between the MOD Rate and the offical HMRC Rate of 40ppm as tax relief sticking to the limit of 10000 miles per financial year and backdated to 6yrs only?

    The Tax Office have said I can do it and are currently sending out the forms for me to fill in.

    For example, if I travelled 1000 duty miles using my own transport (and I do have insurance that covers me for business useage).

    Difference between MOD Rate and Tax Office Rate-14pence per mile (roughly).

    14p x 1,000 miles=£140

    £140 x tax rate (20% in this instance)=£28

    So for every 1,000 duty miles over the past 6 years I can claim £28 as a tax refund?

    I've also been told that it is the difference between the two rates and that you can claim roughly £140 per 1,000 duty miles but I suspect that this is balls.

    I did ask the admin bods in my unit but they were clueless and said they 'did hear about people doing this but haven't actually had anyone doing it' which was really helpful. BTW, they were all civvies before anyone thinks I was slagging off writers/clerks/crab clerks.
     
  2. Here are HMRC links about milage stuff

    http://www.hmrc.gov.uk/incometax/relief-mileage.htm

    Tax relief for business mileage or fuel
    You may be able to get tax relief for business mileage when you use your own vehicle on business, or for fuel you buy when you use a company car. You can go back several years to get the relief - the time you've got depends on whether you've previously sent in a Self Assessment tax return.

    Tax relief for business mileage
    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.

    What counts as business mileage?
    Business mileage is mileage you travel doing your job. It can include travel to a temporary work place but it doesn't include:

    normal travel between home (or anywhere that is not a workplace) and your permanent workplace
    private travel
    Mileage Allowance Relief (MAR)
    You can get tax relief for some or all of your business mileage by getting MAR. You can work out the amount of MAR you are entitled to by multiplying the number of business miles you travel by the approved mileage rate for your vehicle - follow the link below to find out the latest approved mileage rates.

    You are only entitled to MAR if your employer pays you:

    no mileage allowance
    less than the approved mileage allowance rate
    If your employer pays you more than the approved mileage rate, you'll have to pay tax on the extra.

    Get details of approved mileage rates

    How to calculate MAR
    To calculate MAR:

    add up your business miles travelled in the tax year
    multiply your business miles by the approved mileage rate to work out the approved amount
    add up any mileage allowance payments received from your employer
    compare any mileage allowance payments received with the approved amount
    If the approved amount's more, you're entitled to MAR on the difference.

    For example, you use your own car for 850 business miles and your employer pays you 30p per mile. The approved amount is £340 (850 times 40p). The allowance you get from your employer is £225 (850 times 30p). Your MAR is £85 (£340 less £225).

    Records you must keep
    You need to keep records of dates, mileage and details of all work journeys. Your employer needs this information to make expenses payments to you. You also need them to get any MAR.

    If you use different vehicles
    If you use more than one vehicle of the same kind add all your business miles together in one calculation.

    If you use vehicles of different kinds make separate calculations for each one.

    Find out how vehicles are grouped

    If you work for different employers
    If you have two or more employers which are independent of each other, you're due the higher mileage rate for business mileage in each job.

    Tax relief for fuel when using a company vehicle
    If you pay for fuel when using a company vehicle for business travel you can get tax relief on fuel costs, less any payments repaid by your employer and covered by a 'dispensation'. You must keep a record of your business mileage to calculate your expenses.

    How to get tax relief
    To find out how you can get tax relief for your business mileage or fuel read our guide 'How to get allowances and reliefs - employees or directors'.

    If you haven't completed a tax return you've got five years from the 31 October following the end of the year concerned to get the relief. If you've previously completed a return it's five years from 31 January following the end of the year concerned.

    Find out more about getting allowances and reliefs

    How to get allowances and reliefs - employees or directors
    If you're an employee or a director, there are a number of 'tax deductible' expenses you might be able to get. These include the cost of professional fees or subscriptions, business travel and subsistence, tools and specialist clothing.

    You can backdate most claims for up to six years.

    Allowable expenses
    You can only get tax relief for allowable expenses. Expenses are allowable if they're for the cost of:

    travelling you had to do whilst doing your job
    other expenses you had to pay whilst doing your job - and which related only to doing your job
    You can't ask for tax relief if your employer has already reimbursed you for the expense and has agreed a 'dispensation' with us.

    You can find out more about the types of expenses that you can get relief for in our guide 'Tax allowances and reliefs - employees or directors'.

    How you get tax relief for your allowable work expenses depends on whether or not you fill in a Self Assessment (SA) tax return.

    Get information about deductions for expenses

    http://www.hmrc.gov.uk/incometax/how-to-get.htm

    Learn about tax allowances and reliefs for employees or directors

    Getting tax relief for expenses if you don't fill in a tax return
    If you don't have to fill in a tax return, you can get tax relief for your allowable expenses by:

    letter
    phone
    filling in form P810 Tax Review
    filling in form P87 Tax relief for expenses of employment
    By letter
    The first time you ask for tax relief for your expenses you'll have to contact us in writing. If your expenses are over £1,000 we'll ask you to fill in form P87 to give us more details about them.

    By phone
    If you phone us to ask for relief for your expenses we'll only be able to give you tax relief if all of the following conditions are met:

    your expenses are less than £1,000 - or £2,500 for professional fees and subscriptions
    you've claimed them in a previous tax year
    we've accepted your earlier claim
    If you meet the conditions, and we haven't already sent you form P87, we'll give you tax relief right away and repay any tax you've overpaid. Otherwise, you'll have to fill in form P87 before we can allow your claim.

    Form P810
    If you don't have to fill in a tax return each year, we may still need to check your income every so often to make sure you don't pay too much or too little tax. We do this by asking you to fill in form P810.

    When you fill in form P810 you can use it to ask for tax relief for your allowable expenses. If your expenses are over £1,000, we'll ask you to fill in form P87 as well to give us more details about your expenses.

    Form P87
    We'll send you form P87 if any of the following apply:

    you ask us to
    you claim expenses over £1,000
    it's the first time you've claimed
    you're claiming expenses for a year before the previous tax year
    The form asks for details about your expenses and how you worked out the amount you want to claim.

    If you have more than one job, or if you change jobs during the tax year, you'll need to fill in a separate form P87 for each job.

    If you don't fill in form P87 after we send you one, we won't be able to allow your expenses claim. This means that you might pay too much tax.

    Go to form P87

    Getting tax relief for expenses if you do fill in a tax return
    You may have to fill in an SA tax return if:

    you pay tax at higher rate
    you're a director
    you have other income you need to tell us about
    You can claim tax relief for your allowable work expenses on the employment page of the tax return.

    If you claim tax relief for your allowable expenses on your tax return, you don't need to complete form P87.

    Find out about completing your tax return

    Giving tax relief for expenses
    The way that you'll get relief for your work expenses depends on the amount of your claim.

    Claims up to £2,500
    If your claim is £2,500 or less, we'll normally give you relief for your expenses through your tax code straight away. If you claim an estimated figure, we'll review it at the end of the year. We'll make any adjustments that are needed in your tax code for the next tax year.

    Claims over £2,500
    If your expenses claim is for more than £2,500, we'll give you relief in your tax code for the current year and for the next one - and send you a tax return to fill in. We'll also check your tax calculation for the previous year.

    Understanding your tax code

    Learn more about expenses payments and tax relief

    Contact us
    Contact your Tax Office
     
  3. Yes, that is true and I have just completed my 07-08 tax return for 1000 miles of duty travel. You can claim back the tax you paid at your highest rate on the difference between the MOD's rate and HMRC's which is 40p. The second poster added the rules (work only.... not medical, training etc) and you have to keep the paperwork for 6 years.

    If I had a whinge, it would be that I have no choice where I am treated medically, and in the last 3 years, I have been shunted all over the country. Why shouldn't I be able to claim for medical journeys?

    Watch the change of basic rate tax from 22 to 20% if you are claiming for previous years. The HMRC website has the information.

    Incidentally, this is the first year for ages where I have managed to get my act together and claim that tax back; JPA - thank you for auditing me for every claim! It made me keep every single piece of ruddy paper in one place!

    Litotes
     
  4. [quote="Litotes]If I had a whinge, it would be that I have no choice where I am treated medically, and in the last 3 years, I have been shunted all over the country. Why shouldn't I be able to claim for medical journeys?

    Litotes[/quote]

    You can.