Income for tax credits - mileage allowance

A client works through her own ltd company as a driving instructor. Income at present is low but improving and has been subsidised by other part time work. 

A small salary is drawn plus mileage allowance at the 45p a mile rate as the car is not currently owned by the company.

She has been informed by the tax credit office that the mileage allowance should be included as part of her income for their purposes. I checked this with the agents helpline and after some discussion their end they agreed although they thought the allowances had to be included on the P11d and were taxable. They were confused when I told them this was not the case.  

Any guidance would be helpful.

There are 3 comments. Login or register to view them.

No-taxable mileage allowances don't count

tonycourt |

No-taxable mileage allowances don't count

Moulsham |

specifically excludes exempt mileage allowance

Marion Hayes |
Marion Hayes's picture