Re-claim of tax paid on travel allowance.

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T.C.
T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
in General accounting discussion
One of my clients has asked me to help out his father-in-law with a claim against tax paid on travel allowance paid by his employer over the past 7 years. This is not my field of expertise. Any help would be appreciated. Thanks.

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  • laurad
    laurad Registered Posts: 49 Regular contributor ⭐
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    i am not entirely sure what you mean.
    he is claiming back tax on travel allowance paid to him by the company?
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    Yes. I think that is what he is hoping to do.
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    Is this a cliam were he has been paid a mileage allowance at less than HMRC rate?

    If it is then he is entitled to tax relief on the difference between the mileage rate paid and the HMRC rate.
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    Oh dear, I can see that this little "favour" is going to get complicated. :001_unsure: Anyone know of an HMRC note on this?
  • claudialowe
    claudialowe Registered Posts: 275 Dedicated contributor 🦉
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    Surely it would go in box 1.32 on the second sheet of employment pages.

    My understanding is that if, say they were paid 20p per mile, you could claim the other 20ppm* through their tax return - but they would need a UTR for this.

    * 40ppm for the first 10,000 then 25ppm.

    Claudia
  • Ronnie
    Ronnie Registered Posts: 20 New contributor 🐸
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    Mileage Allowance Tax Relief

    If this is to claim mileage allowance tax relief for expenses incurred on difference of HMRC's 40p per mile allowance (up to 10,000 miles, 25p pm thereafter currently), and lesser mileage allowance paid by employer, I have done this for 3 clients:

    - Once by letter, detailing mileage, ex-employer's details, etc for each of 3 years. No mileage allowance had been paid at all by the employer, a small retailer, to the manager who used her own car to bank the cash takings each day.

    - Just recently, using HMRC's form P87, Tax relief for Expenses of Employment. They sent one for each tax year since 2004/05. Possibly P87 form can be downloaded from HMRC's website.

    - Each year for a wife in partnership, who also has employment. I pass the payslips showing the mileage paid and my calculations to their accountant, who includes it on her tax return.

    I'm not sure if the maximum you can reclaim is six years. Also, some people think you get back the difference not paid, ie 40p less 30p = 10p per mile. But what you get is tax relief, ie 1,000 miles x 10p = £100 x 20% tax relief = £20 tax rebate. Further details are on HMRC's website employment section.

    I hope this is helpful.
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    If this is simply a claim for underpaid mileage allowance then you do not need a Tax return or UTR. You can submit a form P87.
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    Thank you!!!!!! :001_smile:
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    Oh, but this form is for the current year. Do you know what form I need to use for a claim against previous years. He wants to claim for the past 7!:001_unsure:
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    I would probably just send a letter to his tax office and see what they say.
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    Me again. I have the P87s for the past 6 years to complete for this "friend of a client". All he has supplied is a list of figures for the fuel allowance he received and was taxed on. Obviously he wants to claim back the tax paid on the fuel expenses paid. Can I just accept his list of figures? Do I not need more information, such as payslips? I think I should draw up some form of "letter of engagement" before I start to. Advice welcome! I do hate this sort of favours! :thumbdown:
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    I am still a little unclear as to what the situation is.

    Do you mean that he received a flat-rate fuel allowance which has been taxed as additional salary?

    If so, the extent of the amount he was paid and taxed on is largely irrelevant. He will simply be making a claim for business mileage travelled at the 40p/25p rates with no reference to any reimbursement.

    If that is the case then I would expect to see a detailed mileage log for the business miles travelled, excluding commuting of course. I think it fairly unlikely that HMRC will authorise a 6 year claim without any documentary evidence to support it.

    If he was paid, say, 10p per mile by his employer then he can claim tax relief on the difference between that and the 40p/25p rates but, again, I would not submit any form without documentary evidence from his employer about the mileage that had been reimbursed.

    Regardless of the letter of engagement I would be getting my fees up front for this. Repayment cases always take longer than you first estimate and clients always expect not to pay anything if no repayment materialises.

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