Hi All
Anyone know anything about tax in particular to do with car allowances. I was Tuped over to a new company at the start of December and my terms should of transferred however today I came to book in my business miles and was left a little stumped to say the least. I will try my best to explain. I get £375 car allowance per month and then at my old company 20p per business mile. Now I know I pay tax and NIC on the £375 as it is basically extra salary and then the business miles at 20p are tax free. The new company have told me that there policy is to pay 13p per mile and that I would be better off being paid that (rather than the 20p) as then I will get NIC relief on the £375 taxed amount. Now it is my understanding that there should be no difference in the tax/NIC I pay on the £375 regardless of the amount Im paid per mile. If anyone can advise that would be great.
Hope that makes sense
Rich
Comments
20p a mile should be tax free.
You are allowed tbe paid up to 45p a mile for the first 10000 miles and 25p thereafter before paying tax on the milage allowance.
The £375 will be deemed salary regardless. You only pay benefit in kind if you have a company car.
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