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| Do
you use your own car for work? |
Hundreds of thousands of people use
their own car for work and many do not know that it is often possible
to claim tax back on the mileage driven. We answer a number of questions
below on this subject:
Am I eligible to claim a tax refund
on my business mileage/petrol?
It depends on your situation. If you are using your employer’s car
then you will not be able to, but if you are using your own vehicle
then there is a good chance that you can.
How much tax can I claim back?
A tax rebate on business mileage
is calculated at 40 pence for the first 10,000 miles and 25 pence
on any miles after, minus any compensation that you might receive
from your employer for using your own car. So for example if you
travel 25,000 miles a year, you would be entitled to tax relief
of:
(10,000 x £0.40) + (15,000 x £0.25)
= £7,750
What if my employer has paid me
for using my own car?
Then this amount is then deducted from the tax relief. So in the
above example, if you employer has paid you compensation of £2,500,
you then have a relief of £5,250.
How do I calculate my tax refund?
Take your tax relief figure, which you have calculated above
and then multiple it by your marginal rate of tax. If you are a
basic tax rate payer, like most people are, this will be 20%. Therefore
in the above example you will be due tax back on business mileage
of:
£5,250 x 20% =£1,050
How do I claim my tax refund on mileage?
If you are self employed, you could simply include the above
figures in your accounts. Alternatively you can make a claim with
the Inland Revenue or apply by submitting a tax
return .
The
above is not advise and can not be taken as it. Tax Fix can not
be held responsible for anything written. We advise you seek professional
help for commencing any tax work yourself.
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