Company car or not?

Company car or not?

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I have a client who has a car through his company - on the provecta employee car ownership scheme.

https://www.zenith.co.uk/site1/public/productsAndServices/viewProductDetails.aspx?id=22.

He receives £250 a month car allowance and pays the monthly payment to provecta and also a maintenence payment.

His employee only pays him 11p per mile for his business travel. He pays all the fuel for the car. He is site based so does alot of business mileage.

My question is, can he claim the difference (45p-11p a mile) through his tax code as essentially he is paying for the car, its not treated as a company car and it doesn't go on his P11d. He is takes on the extra £250 a month he recieves through his salary as salary.

If he can I also wonder why his company are only paying him 11p per mile?

Any thoughts would be much appreciated.

Replies (4)

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By ACDWebb
16th Sep 2011 11:09

On the face of it

Yes he can claim the difference.

The company can set the mileage rate they wish and do not have to pay the HMRC max rate, but if they don't then the employee can claim the difference.

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By Euan MacLennan
16th Sep 2011 14:40

Agreed

Without trawling through the details of the scheme, if he is buying his own car and using it for business mileage, he is entitled to claim the difference between the authorised rate of 45p a mile (up to 10,000 business miles, then 25p) and whatever his employer is reimbursing him for the business mileage.  Any adjustment made through his PAYE code would need to be adjusted annually to reflect his actual business mileage difference.

It is quite correct that the £250 a month round sum "car allowance" is taxed as salary and that if he is using his own car, there should be no car (and in this case, car fuel) benefit on the form P11D prepared by the employer.

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By Steve Knowles
16th Sep 2011 16:51

company clawback

Would guess that the company is restricting the mileage to 11p on the basis that the £250 per month will cover the difference - assume this is fact subject to tax/ni as salary?

If he thinks 11p is not enough he can always ask for more...

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Replying to tellingd:
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By ACDWebb
16th Sep 2011 17:16

Indeed

Steve Knowles wrote:

Would guess that the company is restricting the mileage to 11p on the basis that the £250 per month will cover the difference - assume this is fact subject to tax/ni as salary?

If he thinks 11p is not enough he can always ask for more...

He can, but I wouldn't hold out much hope, or he can just submit a claim to HMRC.

A brief scan of the notes in the link certainly anticipates the allowance it tax & nicable - as one would expect.

Presumably one of the benefits of the scheme is the buying power of the manager in running a substantially larger fleet than a single employer might

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