anyone know anything about mileage allowances/payments?

[negawsklov]

Mrs Negawsklov is paid 22p a mile for her work as a home care worker but was told she is actually entitled to 40p a mile for the 1st 10,000 miles. We submitted a claim to the HMRC for the difference who agreed there was a shortfall in Mrs Negawsklov mileage allowance. They said the entitlement was £1115.11 which we though was brilliant. However, when the cheque arrived it was for £222.00 as Mrs Negawsklov was told as she only pays 20% tax she was only entitled to 20% of £1115.11.  Now I'm not one to dispute our tax system but who the hell pays 100% tax to enable them to claim 100% of their entitlement??? 

[Sam]

Sounds like mrs kjfbkjserbgkge pays 100% tax for 100% entitlement

[negawsklov]

Saying like that I guess your probably right, prehaps my mind is to simple

[Sam]

Saying like that I guess your probably right, prehaps my mind is to simple

Haha, but on a serious note...

http://lmgtfy.com/?q=uk+business+mileage+allowance

[rob.043]

As above, but I thought expenses (including milage allowance) are tax free? Something fishy going on there....

[ade1703]

IIRC what the entitlement is is to claim back the tax on the difference between the 22p she claims and the 40p she was entitled too.
Therefore based on the figure of 1151.11,
I guess she claimed for approx 6195 miles. (1151.11/.18)
20% of 1151.11 is about 230.

there is a form here to fill in to make the claim http://www.hmrc.gov.uk/forms/p87.pdf

worth noting that for tax year 2011/2012 the allowance has gone up to 45ppm

hth

Ade

[dTEA]

Maybe I'm dumb but why are HMRC actually paying you back as it should be the employer who owes the difference for non payment??

Unless you actually mean that she was charged tax on the 22p?

Ultimately, you pay tax for most mileage, as its seen as a benefit, and therefore does she also get given an essential car users allowance as this will also add to the tax liability.  Dependent on how the company pay the allowance, it could be that the tax is paid at source.  Double check which way, as she may have an outstanding tax liability if its not taken at the point of wage being paid.