Fleet News

Own car drivers miss out on tax windfall

EMPLOYERS that reimburse their staff at below the maximum tax-free rates permitted by the Inland Revenue when they drive their own cars on business should at least make their staff aware of tax breaks available, an expert has advised.

Nick Moger, founder of Cash For Car Club, said drivers are missing out on thousands of pounds in unclaimed tax breaks by not claiming back the difference between company and Inland Revenue Approved Mileage Allowance Payment (AMAP) rates, because they are unaware of their rights.

For 2002/2003, the AMAP rates stand at 40p per mile for the first 10,000 business miles, and 25p per mile thereafter.

If, for example, a company reimburses an employee using his or her own car at 20p per mile, a higher rate taxpayer would be able to claim tax breaks of 40% of 20p per mile for the first 10,000 miles, and 5p therafter.

Moger said: 'Many schemes use the AMAP to help fund payments to staff to run their own cars. However, most schemes pay business mileage allowances at below the AMAP tax free rates.

'In addition, hundreds of thousands of employees who have always driven their own cars on business and receive mileage reimbursement rate from their employer below the IRAMR are also due cash under the Inland Revenue's Mileage Allowance Relief Scheme (MARS).

'Our experience shows that most employees do not know about the MARS and don't know how to go about recovering the money to which they are entitled.

'We will calculate how much they are due and complete the paperwork for them.'

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