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Mileage Allowance Relief (MAR)


Wallachie
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I've just been informed today, that I can claim MAR from the Inland Revenue. I get 12p per mile from my employer, for using my personal car for business. Apparently, you can claim up to 40p per mile, so as I get 12p per mile I can claim 28p per mile up to a maximum of 10,000, and 13p per mile above 10,000.

Saying as I cover approximately 20,000 business miles per year, and I haven't ever claimed this, I'm hoping for a rather fat cheque sometime early next year!

If what I'm being told is correct (and I've checked with the Inland Revenue), all you have to do is complete a P87 form for each tax year, and send them off with your P11d and your P60.

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You can only claim the tax back on the difference not the actual difference.

I estimate my business miles every year and they change my tax code to suit so I effectively get a mini tax rebate every month rather than have to wait until the end of the year 169144-ok.gif

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Say you do 10,000 miles and your employer pays you 12p per mile (against the taxman's 40p maximum).

10,000 x 28p = £2800

You can't claim the £2,800 back but you can claim tax back on that amount:

If you pay tax at 22% you can claim 0.22 x £2800 = £616

If you pay tax at 40% you can claim 0.40 x £2800 = £1120

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Just out of curiosity, what if you don't get a P60 from your employer. I heard all about this from my neighbour and I've clocked up just under 10,000 business miles in my frst year with present company.

When I asked them about a P60 they said I wouldn't get one as I didn't have a pension or healthcare with them... sorry but thats nothing to do with mileage. I have all my expenses sheets for the '04-'05 tax year, can you just submit the figures on self assessment on line yourself?

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You don't need a P11D to claim your tax back. They'll take your word for it but be aware they can/do check the mileage with your employer.

If you drive a company car, the P11D shows the car as a taxable benefit. Mileage allowance is not a taxable benefit* (it's there to compensate you for your fuel costs) so it is not included on your P11D.

* it is not taxable as long as it is within accepted limits i.e. if your employer started paying you 80p a mile fuel allowance for a 1.2 Corsa then it is clearly a source of income which is liable for tax

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