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[powerslinky]

Hi all ,
         hoping someone on here will have some idea on this question .

SWMBO has a lease car from her job with the NHS  as a community nurse. She is of course employed , not self employed.

They deduct a set amount  for this car (around the £110 mark I think)from her wages each month . And now recently added (2 years into the contract) another £15 per month for the insurance . This insurance  was all included at the start of the 3 year lease , but now is charged as an extra, that is another issue though & not to do with this enquiry . Servicing ,  parts & labour for repairs ,road tax & breakdown cover is included. basicly she just has to put fuel in the car at her expense.

Her tax code was changed to a lower number just after she took this car , which I presume is the norm.

The cost of fuel is the question I am asking . As she is buying & using this fuel in order to carry out visits to patients , often up to 30 a day & covering sometimes 50 miles in a day.

I am thinking  this fuel cost should  be added to her tax allowance . even at 30 miles a day is 120 miles a week (4day week)

the car probably does 35 to the gallon  (1.4 corsa) so approx 4 gallons a week = £24  x 50 weeks = £1200 a year

Any one think she would be able to claim this .

Out of interest a few of the other girls use their own cars & get 67p per mile for use of car & fuel . On SWMBOS mileage thats around £4000 a year

[TheBoy]

My understanding is that this can be claimed at a lower rate, as its (essentially) a company car. If the company won't do it, as I've just found out (I can only get 28p from my company, not the 45p that hmrc allow), you need to speak to hmrc to claim directly back. This will probably mean self assessment

[LC0112G]

Not sure on this one.

She is being provided a company car, so that is treated as a "Benifit in Kind" by the tax man. Basically, they deem the supply of the car to be worth an amount equivalent to a % of the new price of the car, and it's CO2 emmissions. Usually comes out at about 15-20% of the list price of the car. So if the new car cost £15K, they would deem that the Benifit in Kind is worth 15% * £15K = £2250. HMRC treat this as if you were being paid an extra £2250 in salary per year, about £190 per month, and they tax you on it.

You normally have 2 choices with the fuel. Either the company pays for all the fuel, and you keep detailed notes on how much personal milage you do, and re-imburse the company for any personal miles. Or, you buy all the fuel, and you submit an expenses claim to the company for fuel used on company buisness. I *dont* think you can claim the 45p/mile HMRC allowance - that's for using your *own* car for buisness use, and is intended to cover the cost of depreciation, wear and tear, insurance etc.

What I think your wife should be doing is submitting an expenses claim to the company for the fuel she buys for company use. If that's difficult, keep notes of milage on company business, and divide by the MPG and multiply by the price per gallon. Then once a month submit an expenses claim, and they should re-pay her this expense - £1200 in your case. If the employer won't do this, take it up with her union. Her employer can't expect her to pay for her own fuel. This assumes that there is no "fuel allowance" element to her salary.

[powerslinky]

My understanding is that this can be claimed at a lower rate, as its (essentially) a company car. If the company won't do it, as I've just found out (I can only get 28p from my company, not the 45p that hmrc allow), you need to speak to hmrc to claim directly back. This will probably mean self assessment

Does a company car/van not usually get fuelled by the company though ?

It's a bit of a minefield TB . . .  got to see my own accountant in next couple of weeks so will ask his opinion 

[LC0112G]

My understanding is that this can be claimed at a lower rate, as its (essentially) a company car. If the company won't do it, as I've just found out (I can only get 28p from my company, not the 45p that hmrc allow), you need to speak to hmrc to claim directly back. This will probably mean self assessment

Current allowable rates for company carrs here : http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

The 45p/mile thing only applies to using your own car for company buisness. You can't reclaim the difference between what the company will pay, and what the tax man allows. You can only reclaim the tax on the difference. So if your company only allows 28p per mile, whereas the taxman allows 45p, then the difference is 17p/mile. You can effectively claim  about 3.4p/mile of this back through self assessment.

[powerslinky]

Thanks for those replies.  Will look at this . Same as the insurance thing . Contract was everything in when she signed up.
Now they deduct an extra £15 a month to cover insurance uplifts. It was going to be £30 but there was a refusal by a lot of people who said they would end their lease .

[LC0112G]

Thanks for those replies.  Will look at this . Same as the insurance thing . Contract was everything in when she signed up.
Now they deduct an extra £15 a month to cover insurance uplifts. It was going to be £30 but there was a refusal by a lot of people who said they would end their lease .

I don't understand. Who is paying the lease? Your wife or the company (NHS?)? If your wife is paying the lease, then it's not a company car, and it won't be on her tax code.

However, if the company is paying the lease, then HMRC will adjust her tax code to reclaim the tax on the benefit in kind. And if the company is paying the insurance, then that is also a benefit in kind, and the tax man will adjust her code for that too. Look at it this way - it's costing her (£15*12*20%)  = £36 per year for her to be insured to drive the car for her own personal use. Her company doesn't set her tax code - HMRC does. So you need to ask HMRC where/why this £15 is on her tax code.

[LC0112G]

Out of interest a few of the other girls use their own cars & get 67p per mile for use of car & fuel . On SWMBOS mileage thats around £4000 a year

See : http://www.hmrc.gov.uk/rates/travel.htm

If they really are being paid 67p/mile, then they are well over the 45p/mile allowed by HMRC, and should be paying tax on the excess.

[powerslinky]

Thanks for those replies.  Will look at this . Same as the insurance thing . Contract was everything in when she signed up.
Now they deduct an extra £15 a month to cover insurance uplifts. It was going to be £30 but there was a refusal by a lot of people who said they would end their lease .

I don't understand. Who is paying the lease? Your wife or the company (NHS?)? If your wife is paying the lease, then it's not a company car, and it won't be on her tax code.

However, if the company is paying the lease, then HMRC will adjust her tax code to reclaim the tax on the benefit in kind. And if the company is paying the insurance, then that is also a benefit in kind, and the tax man will adjust her code for that too. Look at it this way - it's costing her (£15*12*20%)  = £36 per year for her to be insured to drive the car for her own personal use. Her company doesn't set her tax code - HMRC does. So you need to ask HMRC where/why this £15 is on her tax code.

Thanks for replying on this  . .   it seems like the employee (my Missus) pays part of the total lease in this case around £110 per month & the NHS the rest. the lease agreement is to the NHS lease department not directly with the lease company (Arnold Clark). When she signed the lease agreement almost 2 years ago it was inclusive of all repairs , breakdowns, tax & insurance ,all in this one sum . she just has to supply ALL fuel , personal miles & WORK MILES. In november 2013 NHS managers sent a letter to all lease car holders that they would , from the 1st december 2013 , be charged an extra £ 30 per month as they had changed insurers &  the insurance was more expensive. Obviously most disagreed with this & it was reduced to £15 per month .

There has however been no change in her PAYE code since then .  But it's the fuel cost that I am more interested in . Is it possible that the cost of her suppyling the fuel is already rolled into the HMRC code ?  If so, how do they know how much she is using ?  She has to do a mileage return to her manager of both personal & work miles per month . But this does not appear on her monthly wage statement anywhere

As for the other system with using your own car  & getting 67p per mile , she seems to thinks that tax is paid after a certain figure is reached 

She is probably going to go back to that system once this lease finishes in May 2015

[LC0112G]

Thanks for replying on this  . .   it seems like the employee (my Missus) pays part of the total lease in this case around £110 per month & the NHS the rest. the lease agreement is to the NHS lease department not directly with the lease company (Arnold Clark). When she signed the lease agreement almost 2 years ago it was inclusive of all repairs , breakdowns, tax & insurance ,all in this one sum . she just has to supply ALL fuel , personal miles & WORK MILES. In november 2013 NHS managers sent a letter to all lease car holders that they would , from the 1st december 2013 , be charged an extra £ 30 per month as they had changed insurers &  the insurance was more expensive. Obviously most disagreed with this & it was reduced to £15 per month .

I have no idea how HMRC would treat this. It sounds like a complicated arrangement, and looks like the NHS has negotiated their own insurance deal independent of the cars lease. If you want to undestand it, then you're going to have to get details fom the NHS and HMRC to see who is paying what, for what, to whom.

There has however been no change in her PAYE code since then . 

So how is she paying the extra £15 per month?

But it's the fuel cost that I am more interested in . Is it possible that the cost of her suppyling the fuel is already rolled into the HMRC code ?  If so, how do they know how much she is using ?  She has to do a mileage return to her manager of both personal & work miles per month . But this does not appear on her monthly wage statement anywhere

Ok, so both your wife and her employer know how many buisness and personal miles she is doing. Since she is paying for all fuel, I'd expect her employer to re-imburse her the cost of the fuel used for buisness use.  This link : http://www.hmrc.gov.uk/cars/fuel_company_cars.htm appears to say she is entitled to 14p/mile for a petrol 1.4L car. This is an expense - so isn't taxed and she should recieve the full amount. It may not be on her payslip, because it's not pay/salary - it's an expense. If she isn't getting this, then I'd want to know why - but it could be that there is some element of fuel allowance in her basic salary. I suspect you'd have to talk to either her Payroll dept, or her union to get ot the bottom of it.

As for the other system with using your own car  & getting 67p per mile , she seems to thinks that tax is paid after a certain figure is reached 

Yes - they should be taxed on (67p-45p) = 22p per mile, so will be paying an extra 5p/mile in tax. In effect thy will only be receiving 62p/mile.

She is probably going to go back to that system once this lease finishes in May 2015

That means paying for the car out of her own money, and paying for her own tyres, servicing, insurance, etc. And the insurance will have to include the correct "buisness useage" clauses so probably won't be cheap. You need to weigh up carefully the pro's and con's of having a company car. I think in her situation I'd expect the company car to be cheaper than having your own car even at 62p/mile.

[powerslinky]

LCO112G

I Have taken your input onboard &  will ask questions to her payroll dept .

In answer to your question " how does she pay the extra £15 ?"  they have simply increased the  "car lease deduction" from £95 to £110 on her pay statement .

the more I think about this  . .  the more it seems something is not quite right.

As said will start asking some questions

Thanks  for your input 

[Kevin Wood]

I'm guessing that the car is being declared as a benefit in kind, as it has affected her tax code. She should therefore get a P11D each year showing what returns have been made in this respect.

Given that she is contributing to the lease and insurance costs of that vehicle, she is not in receipt of the full benefit of that car as a company vehicle, so I would expect only a proportion of the vehicle's value as a benefit to be declared pro-rata the proportion of the costs that her employer is paying.

She should be able to claim tax relief at the allowable mileage rate of the business mileage she is doing, as that is an expense incurred in doing her job. Again, though, they have complicated it, because it's not her own car, neither is it 100% a company vehicle, so at what mileage rate should she be claiming? It sounds like a complete can of worms, to be honest.

I'd be looking seriously at using my own car instead, faced with that mess.

[powerslinky]

I'm guessing that the car is being declared as a benefit in kind, as it has affected her tax code. She should therefore get a P11D each year showing what returns have been made in this respect.

Given that she is contributing to the lease and insurance costs of that vehicle, she is not in receipt of the full benefit of that car as a company vehicle, so I would expect only a proportion of the vehicle's value as a benefit to be declared pro-rata the proportion of the costs that her employer is paying.

She should be able to claim tax relief at the allowable mileage rate of the business mileage she is doing, as that is an expense incurred in doing her job. Again, though, they have complicated it, because it's not her own car, neither is it 100% a company vehicle, so at what mileage rate should she be claiming? It sounds like a complete can of worms, to be honest.

I'd be looking seriously at using my own car instead, faced with that mess.

Agree with you there Kevin . We are probably going to go down the "own car" route when this lease ends