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• # 99272
• Sat 26 Apr 2014 08:53 PM

Hi,

Maybe a silly question as ive not yet taken the payroll exam but I do payroll as part of my role at work and was just doing some more research as im considering a job change to something that is purely payroll and penisions.

looking into the expenses allowances ive seen that the fuel allowences has an approved amount so you dont have to pay tax.  Can anyone clarify this snippet from the HMRC website for me as it makes no sense.   Maybe its just too late LOL. 

Anything below the ‘approved amount’

You won’t have to report to HMRC or pay tax, but:

• your employee will be able to get tax relief (called Mileage Allowance Relief, or MAR) on the unused balance of the approved amount
• you can make separate optional reports to HMRC of any such unused balances under a scheme called the Mileage Allowance Relief Optional Reporting Scheme (MARORS) - contact your HMRC office to join the scheme

Is that saying that if i only received £100 expense costs i could get the remaining balance as tax releif?   that seems odd to me.  I must be mis-intererating this somewhere im sure.

Any clarification would be great.

Thanks

Lisa

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• # 99273
• Sat 26 Apr 2014 09:10 PM

I think it's all to do with the 45ppm that HMRC see as an approved allowable amount that a business can give to it's employees for mileage allowance without having to report on the P11D end of year expenses report or have any other tax implications.

For example - if a business pays it's employees 30ppm for any allowable business use travel - the employee, on his self assessment or as an additional individual claim to HMRC, is entitled to claim tax relief for an additional 15ppm for every mile he was paid for in that year - taking him up to the permitted and approved 45ppm.

ON the otherhand - if the employee is paid 60ppm - he would have to declare the additional 15ppm as an 'over and above approved amount' and therefore tax would have to be paid on the additional income.

• Carol Saunders
  Lady of Ledger Book Keeping
  Telford, Shropshire

  
  

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• # 99274
• Sat 26 Apr 2014 09:16 PM

now that makes perfect sense, thank you :) 

why couldnt they make it sound so simple haha

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