Do you use your own car?
Are you paid less then 45p a mile for using the car?
Then you could be entitles to claim a tax refund.
Many care workers and charity volunteers use their own cars for their jobs. Most will receive some sort of compensation for this use by way of a mileage allowance.
However, if your employer or the organisation that you volunteer for pays you a mileage allowance for using your own car and it is less than 45p / mile then you could be entitled to a tax refund.
Making a claim is really easy and something you can do yourself.
All you need is a form P87 from HMRC – stay with me!
It’s just their fancy name for a four page form – most of which you will not need to complete.
Here’s an easy to understand guide to how to claim it…
Download and print the form from here:
Now this is easy stuff!
You name, address, employers name & address – I won’t teach you to suck eggs on that one. I think you can manage.
Two boxed to be aware of though -at the top right hand corner.
You need to enter you national insurance number and employer PAYE reference number.
You can find these on your pay slip or your P60 (you get this each year about May time) or ask you payroll / HR department.
One final thing – you claim the tax back for each tax year.
A tax year runs from 6th April to 5 April each year – use 1st April to 31 March to make it simple.
So you need to organise your expenses claims into tax years.
If you are claiming the rebate for 1st April 2010 to 31 March 2011 then enter the tax year 2011 in the very top right hand box – Year to 5 April 2011 in this example.
If you are claiming the rebate for 1st April 2011 to 31 March 2012 then enter the tax year 2012 in the very top right hand box – Year to 5 April 2012 in this example.
You get the idea!
OK just a couple of easy calculations to do on this page and then you are nearly done.
About have way down the page you have the box – Total Business Mileage.
Working on your expenses in a tax year from 1st April to 31st March – enter the total business miles that you have travelled.
If less than 10,000 miles – just complete box one by multiplying the miles by 45p or 40p depending on the tax year.
If over 10,000 you need to put 10,000 multiplied by 45p/40p into box one
the total miles less 10,000 multiplied by 25p in box 2.
Now that is the hardest bit done!
Add box 1 to box 2 and enter the total into box 3 and box 6.
(Assuming that you are not claiming for a motor cycle or a cycle)
Enter the amount that you were repaid in mileage from your employer into box 7.
Obviously this should be less than the total in box 6 otherwise there is no refund due.
Box 8 is simply box 6 minus box 7.
This is the amount that you will get tax relief on BUT not the amount of the cheque that you will receive!
The refund will be the box 8 amount multiplied by the highest rate of tax that you pay – likely to be either 20% or 40% (and could be 50% if you earn over £150,000!).
So to get the total amount of the refund that you will receive you multiple box 8 by 20% or 40% – depending on your highest tax rate.
If you are only claiming mileage you can ignore this entire page – move onto page four.
A simple page to complete.
Enter the total from the final Box labelled 8 on Page two into the box marked 8, in section 6.
The same total goes into Box 14 on that page.
Then all you need to do it sign and date it.
Finally – send it off to HMRC.
HM Revenue & Customs
Pay As You Earn
PO Box 1970
Give it a few weeks and the refund should arrive. If it doesn’t give them a call to chase it on 0845 300 0627
Hope this helps!